Survey: Employer Health Insurance Costs Steadily Rising.

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Author: Rovner, Julie

Premiums for employer-provided health insurance rose 13.9 percent this year, according to a new survey, the largest single-year increase since 1990, six times faster than overall inflation, and the third straight year of double-digit increases. The average cost of individual employer-based coverage hit $3,383 in 2003, and family coverage rose to $9,068. "You could buy a new Hyundai Accent every year for the cost of family health insurance," said Kaiser Family Foundation President Drew Altman, whose organization conducted the survey of more than 1,800 health benefits administrators along with the Health Research and Educational Trust. Despite the increases, the survey found surprisingly few employers who dropped coverage or limited eligibility, although most of them did pass along more costs to workers.

Since 2000, the amount of health insurance premiums, deductibles and co-payments charged workers has risen by roughly 50 percent. This year, the survey found, 44 percent of workers are in plans that require them to pay a separate deductible for hospital care â€" something virtually unheard of in the private sector, and something that Medicare reformers say they want to end in that program. Those new and rising costs for workers, in turn, have boosted health inflation back near the top of voter concerns. A separate Kaiser survey in August, said Altman, found that 33 percent of those polled said they were "very worried" that their health insurance costs will rise in the next six months. That tied for the top spot with concern that income might not keep up with rising prices. Worries about healthcare costs, Altman said, are at their highest level among the public in three years, with 42 percent calling it the most important healthcare problem government should address.

Employers, meanwhile, say they have few ideas about what it will take to get healthcare costs under control. Just over a fifth of those surveyed said they thought "disease management" programs that seek to coordinate care for those with chronic ailments could be "very effective" in containing costs. But making workers pay more of their bills, moving to high-deductible plans and giving employees money to pay their own routine bills, and moving back to more tightly managed healthcare plans all polled under 15 percent. "There's a lot of uncertainty about what to do," said Kaiser Vice President Gary Claxton, one of the study's lead researchers. While other studies have suggested that the rise of actual medical claims, apart from premiums, is beginning to slow, things still look bleak for next year, the survey found. More than half the firms surveyed said they will likely increase workers' costs again in 2004.

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By Julie Rovner