Premiums for family health plans approaching $16,000

The annual survey released Tuesday by two major research groups served as a glaring reminder that the nation’s problem of unaffordable medical care is anything but solved.

Premiums for a family plan are averaging $15,745, with employees paying more than $4,300 of that. And lower wage workers are paying more for skimpier coverage than their counterparts at upscale firms.

Overall, “it’s historically a very moderate increase in premiums,” said Drew Altman, president of the Kaiser Family Foundation, which conducted the survey with the Health Research & Educational Trust.

He quickly added: “But even a moderate increase feels really big to workers when their wages are flat or falling.” General inflation rose only 2.3 percent, by comparison.

Following a 9-percent hike in premiums last year, the 2012 increase quickly became fodder for political debate. Republicans said President Barack Obama’s promises to control health care costs ring hollow in light of the findings.

But the most significant cost-control measures in Obama’s law have yet to take effect, along with the president’s big push to cover the uninsured. The cost controls include a new tax on the most expensive insurance plans and a powerful board to keep Medicare spending manageable.

SAVINGS CITED

Trying to head off critics, the administration issued a report estimating that consumers have saved $2 billion as a result of the health care law. That’s due to a combination of insurance rebates for employers and individual policy holders, as well as closer state oversight of proposed rate increases, facilitated by Obama's law.

$750 BILLION WASTED

But hang on to your wallets: The Kaiser survey showed premiums for job-based family coverage have risen by nearly $2,400 since 2009 when Obama took office, with a corresponding increase of nearly $800 for employee-only coverage.

“We aren't happy to see any increase in health insurance premiums,” said Gary Cohen, head of the administration’s Center for Consumer Information and Insurance Oversight, adding that officials are “heartened” it was only a modest rise this year and look forward to slowing costs as more provisions of the health care law take effect.

Most independent experts say rising premiums reflect underlying problems with the health care system that have frustrated policymakers of both parties for years, as well as corporate benefit managers.

Indeed, only last week an arm of the National Academy of Sciences estimated that about 30 cents of every dollar spent on health care  — $750 billion a year — is wasted through unnecessary procedures, cumbersome paperwork, uncoordinated care and fraud.

Obama says he’s working to make health care more affordable for all by leveraging the power of government programs like Medicare to pay hospitals and doctors for quality results, rather than sheer volume of tests and procedures. But that will take time.

Republican Mitt Romney wants to give future retirees a fixed amount of money to pick either private insurance or a government plan modeled on Medicare. He expects the private market will find ways to deliver quality service at lower cost. The GOP approach mirrors the shift away from traditional pensions, which pay a standard benefit, to 401(k) savings plans that limit the employer's exposure.

The Kaiser/HRET survey found that employee-only coverage went up 3 percent this year, with annual premiums averaging $5,615. Companies usually pick up a larger share of the cost for employee-only coverage, so workers typically paid about $950 of that.

The availability of employer-based coverage, the mainstay for working people and their families, remained stable this year, with 61 percent of all companies offering health benefits. However, only half of companies with 3 to 9 workers offered health insurance, while virtually all large firms with 1,000 or more employees did so.

COST SHIFTING

Companies continued shifting costs to their workers, at a somewhat slower pace. A trend toward steering employees into plans with high annual deductibles eased a bit. The deductible is the amount you must pay each year before insurance kicks in. The survey found that 34 percent of workers are in plans with annual deductibles of at least $1,000 for single coverage, up from 31 percent in 2011.