Health insurance premiums jump in '09

WASHINGTON -- An average family health insurance policy now costs more than some compact cars, and four in 10 companies will likely pass more of that expense on to workers, according to a closely watched survey of businesses released Tuesday.

The average cost of a family policy offered by employers was $13,375 this year, up 5% from 2008, the Kaiser Family Foundation and the Health Research & Educational Trust survey found. By comparison, wages rose 3% over that period, the study said.

The new numbers underscore warnings by President Obama about the growing cost of health insurance and were embraced by Democratic lawmakers who are pushing for legislation to change the nation's health care system. "The trends are crushing millions of businesses and American families," Senate Majority Leader Harry Reid of Nevada said.

The annual survey of more than 2,000 companies also found that 40% of small-business employees enrolled in individual health plans pay annual deductibles of $1,000 or more. That's almost twice the number who paid that much in 2007.

Drew Altman, president of the Kaiser foundation, said it is the combination of higher health care costs along with the recession and other rising prices that "creates the pain level."

Those who oppose Democratic versions of the health care legislation, such as Senate Minority Leader Mitch McConnell of Kentucky, agree that the rising cost of insurance has become a hardship on families and businesses. The two parties disagree on how to address the problem.

"It's a significant issue for our members," said Jeri Kubicki with the National Association of Manufacturers. "They want to continue to offer this benefit. At the same time, it's a daunting task to try to control costs."

Since 1999, health insurance premiums for families rose 131%, the report found, far more than the general rate of inflation, which increased 28% over the same period. Overall, health care in the United States is expected to cost $2.6 trillion this year, or 17% of the nation's economy, according to the non-partisan Congressional Budget Office.