Every year, the Kaiser Family Foundation releases its survey of employer health benefits. Every year, I’m somewhat shocked at the price of health insurance in the United States. This year is no different.
The survey looks specifically at the cost of health insurance provided by employers as part of benefits packages. Most people in the United States still get their health insurance that way. This year, the average annual cost for an individual plan in the United States was $5,615. For a family, it was $15,745.
This is a shockingly large amount of money. This is the average premium. In fact, almost 20% of individuals paid more than $6,700 for an individual plan, and almost 20% of people paid almost $18,900 for a family plan. That means that if you’re in a family making $60,000, which is not a small amount of money, a family insurance plan might cost 25% of your income. That’s also just the premium. These costs don’t include co-payments or deductibles, which also come out of individuals’ pockets.
About half of firms offer no dental benefits. Almost three-quarters of firms offer no vision benefits. While some consider these “optional” benefits, try imagining life without adequate correction of imperfect vision. Try imagining it without healthy teeth.
The percentage of firms offering benefits was pretty much unchanged from last year. About 61% of firms did so, which isn’t statistically different from last year. Almost all large firms, or those with 200 or more workers, offered health benefits. But such firms are in the minority, as most employers in the United States are quite small.
Unfortunately, workers’ earnings have not gone up at nearly the rate that insurance premiums have. This is a chart showing the increases in health insurance (as well as workers’ contributions to them) compared to earnings:
As I said before, this is just premiums. The deductibles aren’t insignificant either. For an individual insurance plan, the average deductible for an HMO type plan was $690, for a PPO it was $733, and for a POS type plan it was over $1,000. More than one-third of all covered workers had a deductible that was more than $1,000 from 2006-2012. About 14% of people had a deductible over $2,000. Family plans were, of course, much more expensive. More than 22% of HMO family plans, 33% of PPO family plans, and 42% of POS family plans had a deductible over $2000.
There’s good news in the report, though. With the passage of health reform, about 2.9 million adult children were able to get insurance through their parents’ plans, which is a significant increase over the previous year. More than 40% of plans reported that they had expanded their list of services to include additional preventive care due to the Affordable Care Act as well.
Moreover, although the increase in the cost of health care is always troubling, for the last few years it’s been much slower than in the past. Premiums did rise about 4% in the last year, but not long ago increases of 10% or more a year were the norm. Coverage has also been stable, with fewer employers dropping coverage (or even adding it) compared to not too long ago.
The bottom line is that insurance remains very, very expensive in the United States. Regardless of whether the bills are paid for by employers or employees, it’s really the individuals who are paying fort their health care, even if it’s in lost wages to health benefits. Not enough people have coverage, and for those who do, it’s becoming even more prohibitively costly.
UPDATED: An earlier version of this blog incorrectly reported the average deductible for a PPO type plan to be $4,733.
–Aaron Carroll
Dr. Aaron E. Carroll is an associate professor and vice chair of health policy and outcomes research in the department of pediatrics at the Indiana University School of Medicine. He blogs about health policy at The Incidental Economist and tweets at @aaronecarroll.
As part of our ongoing effort to raise awareness of health services research and increase its application in policy and practice, AcademyHealth has partnered with Austin Frakt, Ph.D., and Aaron Carroll, M.D., M.S., to contribute posts on the subjects of health care costs, delivery system transformation, and public and population health – areas AcademyHealth has identified as a priority in the current policy environment. As regular contributors, they’ll be discussing current events with an eye toward how new and existing research informs the issues