Survey: Health insurance costs surge in 2011

WASHINGTON -- As Congress works to decrease the federal deficit by cutting health care programs such as Medicare, policy experts say health providers will have to find money elsewhere, which could force insurance premiums higher for most Americans.

That comes on top of a 9% increase in annual premiums to cover a family of four, according to a survey released Tuesday by the Kaiser Family Foundation. Most of that increase comes from rising health care costs, said Gary Claxton, director of Kaiser's Health Care Marketplace Project.

"It might be that the discussion going on with the debt is just as important," Claxton said. If health care spending is cut by the deficit "supercommittee," "then those providers will look to get some of that back elsewhere."

That, he said, will make it harder for private insurance companies to negotiate for lower rates for employers and privately insured individuals.

The 12-member supercommittee must create a plan to reduce the federal debt by $1.5 trillion by Nov. 23, and Congress must vote on it by Dec. 23.

It's impossible to predict the supercommittee's results, said Robert Zirkelbach, spokesman for America's Health Insurance Plans. But offering less government health coverage could hurt those who do pay for insurance.

"Historically, these costs get shifted to people with private coverage," he said.

A growing number of uninsured and underinsured Americans means the "deductible is constantly rising for the privately insured," said Quentin Young, national coordinator for Physicians for a National Health Program. That group advocates for a single-payer health system.

Kaiser's survey found that annual insurance premiums to cover people through their employers average $5,429 for single people and $15,073 for a family of four in 2011. Those rates rose 8% for single people and 9% for families. In 2010, premiums rose just 3% for families from the previous year. Kaiser Family Foundation also found premiums were lower for families at small firms than for those at large firms.

"I don't think it is a big difference from what we've seen for a long time," Claxton said.

Claxon estimated, based on Office of Management and Budget figures, that about 1% of the rise came from changes due to last year's health care law, allowing children up to age 26 to remain on their parents' insurance, and requiring preventive medical services, such as annual exams and colonoscopies, with no co-pay.

The rest came from rising health care costs, though he said some insurers may have raised rates in expectation of higher health costs.