Report: Insurance costs for U.S. workers have surged this year

Health insurance costs for the nation's workers skyrocketed this year, even as the quality of many plans deteriorated, according to an independent report released Thursday.

The average worker is now paying roughly $4,000 toward employer-sponsored family healthcare coverage — a jump of $482 (14 percent) above last year's figure, according to the report. By contrast, overall premium costs rose just 3 percent above 2009 levels, researchers found, and employer contributions toward family coverage did not rise at all.

The findings — stemming from an annual survey conducted by the Kaiser Family Foundation (KFF) and the Health Research and Educational Trust (HRET) — are an indication that businesses have responded to the recession by shifting more and more costs to their employees.

Drew Altman, KFF's president and CEO, told reporters that cost sharing is an important part of employer-based healthcare coverage, but excessive cost sharing will eventually lead to hardships for workers that could threaten their access to care.

"They're just getting less for more," Altman told reporters on a press call Thursday.

Long-term cost trends are also reason for concern, the researchers noted. Over the past five years, workers’ wages have increased 18 percent while their premium contributions have leapt 47 percent.

"That gap," Altman said, "describes the pain for working people."

Megan McHugh, research director at HRET, noted another "troubling" trend: Very few employers are considering the quality of benefits when they choose their healthcare plans. Indeed, just 34 percent of large firms, and 5 percent of smaller companies, say they review performance indicators when selecting plans. And less than half of those who do such reviews said their research had any influence on their ultimate decision.

"I hope we see these numbers rise," McHugh said. 

Gary Claxton, a KFF vice president and lead researcher behind the survey, said the tough economy was the likely reason that quality didn't play a larger role in the companies' decisionmaking. "In a recession," he said, "price is what pushes things."

The report highlights an issue that didn't get much attention during the months-long healthcare reform debate: Continuing a national system of employer-sponsored coverage ("if you like your plan, you get to keep it") doesn't necessarily ensure the benefits will be high-quality.

Coverage for workers today, Altman said, is "looking less and less like the comprehensive coverage that their parents got."

Among the other findings: 

• Thirty-eight percent of large firms trimmed benefits or increased cost-sharing in 2010 — up from 22 percent in 2009 — while 36 percent of small firms reported scaling back benefits or shifting more costs to workers, up from 22 percent last year.

• Many employers are hiking annual deductibles on workers, with 27 percent of covered workers now in plans with deductibles higher than $1,000 — up from 22 percent in 2009. Among small companies (with 3-199 workers), 46 percent of workers have deductibles at least that high.

• The average worker is now assuming 30 percent of the premium cost for family plans — up from 27 percent last year — and 19 percent of single-coverage premiums, a hike of 2 percent above 2009 levels. Those figures mark the first statistically significant increase in both categories since the researchers launched their annual survey 12 years ago. 

The survey was conducted between January and May, meaning most responses were gathered before Congress passed the healthcare reform law. 

More in Healthcare

Dem report: Justices could erase $65 billion in ObamaCare subsidies

Read more »