September 2007

Survey shows rise in health insurance premiums

Premiums for employer-sponsored health insurance rose an average of 6.1 percent in 2007, according to the 2007 Employer Health Benefits Survey by the Kaiser Family Foundation and Health Research and Educational Trust.

The increase is still less than the 7.7 percent increase reported last year, but is still higher than the increase in workers’ wages (3.7 percent) or the overall inflation rate (2.6 percent), as revealed in the study.

The 6.1 percent average increase this year is also the slowest rate of premium growth since 1999, when premiums rose 5.3 percent. Since 2001, premiums for family coverage have increased 78 percent, while wages and inflation have increased 19 percent and 17 percent, respectively.

The average premium for family coverage in 2007 is $12,106, and workers, on average, now pay $3,281 out of their paychecks to cover their share of the cost of a family policy.

In spite of the extensive attention paid to consumer-driven health plans, the survey found that these plans have made only a small inroad into the employer market. Such plans cover about 5 percent of all covered workers, which is not statistically different from the 4-percent share recorded in 2006.

Premiums for these high-deductible plans are generally lower than for other types of plans; though in addition to the premiums, employers may also contribute money to the savings accounts.

Source: Kaiser Family Foundation, www.kff.org; Health Research and Educational Trust, www.hret.org

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