The impact of rising
health costs used to be absorbed for many working people in the U.S. by
employers who for the most part didn’t pass along increases in premiums. Call
that the good old days of group health insurance—especially in Florida.
Companies now simply
are unable to incur annual 6-8 percent premium increases and maintain viable
profit margins. It isn’t about lack of management compassion so much as it is
about company survival.
Rising costs are not an
anomaly, of course. Inflation constantly exerts upward pressure on prices, but
the rise in group health insurance costs exceeds the rate of inflation, which
in recent years has ranged between 2 and 4 percent.
The cost of covering a
family of four under an employer health plan is expected to rise 7 percent in
the next year, according to Milliman, an actuarial and health care consulting
firm. According to their data base, that
will raise the premium to more than $20,000. By comparison, the cost for such
coverage 10 years ago was slightly more than $9,000.
Most employers are
passing along the cost of group health insurance—and then some. Out-of-pocket
costs for a four-member family of an employee rose 9.2 percent last year to an
average of almost $3,300, Milliman says. However, this compares to about $7,100
for a non-group policy for a family of four, according to Kaiser Family
Foundation.
The federal Agency for
Healthcare Research and Quality, a Maryland organization, has a different set
of numbers for average group health insurance premiums, possibly using a
different size family as a model. Last
July, the agency said the average premium for family coverage in 2010 was about
$14,000.
More to the point,
Florida had the highest average cost for a group premium of the 10 most
populous states surveyed – $1,000 more than the national average and $2,000 a
year more than the average premium in the least expensive states in the group,
Ohio and Georgia.
The Affordable Care Act,
which is being parsed by the U.S. Supreme Court at the moment, was supposed to
change some of these dynamics and reduce the cost of health insurance across
the board. However, there are indicators that the overall cost to employers and
employees will continue to rise, regardless of the legal fate of the Act.
So for the foreseeable
future, companies and their employees will continue to struggle with rising
group health insurance premiums, with benefits being cut and employee
contributions increasing.
