Health insurance costs grow 5% in '08
WASHINGTON -- Health insurance premiums rose a modest 5% this year as coverage gets skimpier, researchers said Wednesday.
The 5% increase was comparable to last year's uptick. Overall, premiums for increased to $12,680 for coverage of a family of four and premiums for single coverage increased to $4,704, according to the Kaiser Family Foundation and the Health Research and Educational Trust. Employers pick up, on average, about three-quarters of that cost.
Over the past decade, insurance premiums have grown much more quickly than wages and inflation. That wasn't the case this year. But to help slow the costs of health insurance, companies are increasingly offering coverage that requires their workers to pay more of their medical expenses before the insurance will kick in.
In just one year, the percentage of workers enrolled in high-deductible insurance of $1,000 or more jumped to 18% from 12%.
"We may be seeing the tip of the iceberg of a trend towards less comprehensive, skimpier health insurance coverage for many working people," said Drew Altman, president and CEO of the Kaiser Family Foundation, which conducts health research.
The shift toward high-deductible insurance was most dramatic for workers in small businesses, where more than one in three covered workers must pay at least $1,000 out of pocket before their plan will start to pay a share of their health care bills. Generally, the more liability customers assume for their health expenses, the less insurers will charge them.
Often, high-deductible plans are coupled with health savings accounts. Consumers who enroll in such plans can set aside money on a pretax basis and then use the savings to help pay for some of their medical expenses. Also, the accounts can be used to help pay for retirement.
The Bush administration has aggressively pushed the accounts as a way to lower health inflation and make consumers smarter shoppers. Altman said the Kaiser survey released shows more companies opting for health saving accounts. But a bigger trend was the movement toward high-deductible plans with no savings component.
