U.S. Companies Paid 9% More For Health Insurance Last Year

Sept. 27, 2011
Over 10 years the cost of health insurance provided by an employer has risen 113%, compared to a 24% increase in national wages and a 27% increase in inflation.

Company-provided health insurance, one of the largest costs of U.S. businesses and households alike, rose 9% over the past year despite the sluggish economy, according to a new study released on Sept. 27.

The average cost for employer-provided family health care insurance has hit $15,073 a year, a burden that has more and more companies dropping coverage for employees, according to the Kaiser Family Foundation's annual study of health insurance costs.

Just one to two percentage points of the nine percent increase can be blamed on the Obama administration's sweeping 2010 health care reform act, which increased insurance coverage for preventive medical services and allowed families to keep grown children under 26 on their health plans, according to Kaiser.

In fact, the study pointed out, over 10 years the cost of health insurance provided by an employer has risen 113%, compared to national wages just 34% higher on average, and inflation of 27%.

The employer contribution to insurance costs is more than double that of employees, but worker contributions are increasing faster, and rose 131% in the 10 years to 2011, the study showed.

Moreover, the study also said that more companies and employees were agreeing to higher deductibles -- the portion the insured person or family must pay toward medical treatment before insurance covers the bill -- to cap premium increases.

In 2011 only 59% of small firms -- those with fewer than 200 employees -- were offering health benefits, compared to 67 % in 2001, Kaiser said.

But 99% of firms with more than 200 workers continued to provide health benefits.

"Critics of the national health reform law passed in 2010 like to blame everything but the weather on 'Obamacare,' but... regardless of how you feel about the Affordable Care Act, its effect on premiums this year is modest," said Drew Altman, Kaiser Family Foundation chief executive.

"While the conventional wisdom is that private insurance does a better job of controlling costs, the opposite is true."

White House deputy chief of staff Nancy-Ann DeParle called the Kaiser report "a look backwards" and argued that the increase in health insurance premiums is expected to slow sharply in the next year.

Writing on the White House website blog, she said the sharp increase came as insurers made assumptions in 2009 that medical care costs would spike upward and that President Barack Obama's Affordable Care Act would add to insurer costs.

"In the end, both assumptions were wrong -- but insurance companies still charged high premiums and earned impressive profits," she said.

"Key Affordable Care Act policies are starting to take effect that make insurance more affordable," she said.

Copyright Agence France-Presse, 2011

Popular Sponsored Recommendations

How to Build Zero-Cost On-Site Solar and Storage Projects

Nov. 25, 2023
The Inflation Reduction Act offers tax credits, incentives, and financing that enable no-cost projects. In Enel’s eBook, discover the critical role that incentives play in your...

Navigate Complex Cybersecurity Requirements With Purpose-Built Technology Solutions

Dec. 6, 2023
The CMMC represents a critical mandate from the U.S. DOD. Aerospace & Defense manufacturers that handle controlled unclassified information (CUI) must comply with CMMC requirements...

Smarter Savings for Manufacturers - Guide

Sept. 11, 2023
Boost your manufacturing sales and revenue while reducing costs. Learn how one platform can help your business be more agile and productive in today's market.

You Cannot Stay Competitive by Bolting New Technologies to a Legacy ERP

Oct. 20, 2023
Read this white paper to understand the benefits of shifting to a next-generation ERP system as part of a DOP.

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!