Health Insurance Costs Outpace Income Growth
A new report released by the Commonwealth Fund pegs the cost of health insurance as outpacing income growth in all 50 states. According to the report, 62% of Americans resided, by 2010, “in a state where health insurance premiums equaled 20 percent or more of earnings for a middle-income individual under age 65.” The report also cites a 50% increase in premiums for employer-sponsored family health insurance between 2003 and 2010, with annual premiums reaching an average of $13,871 by the latter date. Employees’ annual expenditures for insurance rose by 63% by 2010, to an average of $3,721 per year for a family policy. Additionally, per-person deductibles increased an average of 98% from 2003 to 2010, with average deductibles exceeding $1,000 in 29 states by last year. Slowing the rate of healthcare premium growth is imperative, the study’s authors write, noting that reforms must apply to the private and public sectors alike. Besides improving the quality of care, they advocate that wasteful overhead spending be curbed and innovative ways means of paying for care be implemented. “New rules for insurers, along with new models of health care delivery such as accountable care organizations and new ways of paying doctors and hospitals, can help control healthcare costs and provide families and business owners with the relief they need," Commonwealth Fund President Karen Davis said in a statement. In executing the study, the authors analyzed nationwide private sector health insurance premium and deductible trends between 2003 and 2010 for those under age 65. Insurance data was derived from the federal government’s annual surveys of employers conducted for the insurance component of the Medical Expenditure Panel Surveyl income data came from the U.S. Census Bureau’s Current Population Survey of households. To view a podcast about the study, click here: