WASHINGTON – Health insurance costs, which have been increasing three times as fast as wages, may be slowing down, with premiums for employer-provided health coverage increasing by only moderate amounts for the second consecutive year, according to a survey released Tuesday by leading health research organizations.
The average annual premium for an employer-sponsored health plan is now $16,351 for families, up 4 percent from last year, the survey by the Kaiser Family Foundation and the Health Research and Educational Trust found. Of that amount, employees are shelling out an average of $4,565 towards their policies.
Annual premiums for employer-sponsored individual plans increased by 5 percent to $5,884, with employees paying on average $1,000 for their coverage.
These increases in health insurance premiums are moderate compared with historical prices. But they are still increasing faster than wages, which rose 1.8 percent over the past year, according to the foundation. In the past decade, employer-sponsored health insurance premiums have increased by 80 percent, nearly three times as fast as wages.
“We are in a prolonged period of moderation in premiums, which should create some breathing room for the private sector to try to reduce costs without cutting back benefits for workers,” said Drew Altman, president and CEO of Kaiser.
The results of the the suvery of more than 2,000 employers undercut critics of the Affordable Care Act, who claim the 2010 legislation is dramatically driving up health care costs.
“This is good news for Obamacare because critics will have a harder time blaming premium increases on Obamacare because there aren’t any,” Altman said.
However, companies are still passing on more costs to employees.
“People still feel the pain of health care costs and worry about paying their health care bills,” Altman said.
According to the survey, 78 percent of workers pay general annual deductibles. The average cost that employees pay for these on individual plans rose to $1,135 this year, marginally up from $1,097 last year. But the change is more pronounced compared with past years like 2009, when workers were paying only $826 for an individual plan annual deductible.
Kaiser Vice President Gary Claxton pointed out that high average deductibles do not necessarily represent the average consumer’s costs because the few sick people requiring more medical care typically skew the results.
“Most consumers don’t pay the average amount out of pocket because most health care is used by the few people who are very sick,” Claxton said.
Employers are also trying to curb costs by focusing on wellness programs. Almost all large employers, 200 or more workers, offer at least one wellness program. Of those, 57 percent provide at least one disease management program, which can keep health care costs down by monitoring blood pressure, weight, asthma and other conditions, officials said.
The number of workers enrolled in grandfathered plans – those exempt from many Affordable Care Act provisions – dropped to 36 percent, from 48 percent last year, and 56 percent in 2012. This suggests employers are making changes to their policies causing them to lose their grandfather status, such as reducing benefits or raising workers’ costs.
“This will be an important issue to watch next year as employers will have more flexibility and could ask workers to pay more because of their lifestyles and health conditions,” said Claxton, lead investigator of the report.
Altman noted that it is unclear whether the moderation in employer-sponsored health premium hikes will continue once the legislation takes full effect.
“If anybody tells you they know for sure, they don’t,” he said.