Insurance costs tilting toward workers

WASHINGTON -- An annual survey released Thursday finds that workers are paying, on average, about $482 more for job-based family health insurance this year as companies force employees to shoulder more of the burden of health care costs.

The increase in premiums, up 14 percent from last year, means that workers are paying nearly all of a $495 increase in the average cost of family coverage this year.

Employers' contributions to family coverage showed no increase at all in 2010, according to the Employer Health Benefits Survey by the Kaiser Family Foundation and the Health Research & Educational Trust.

Drew Altman, the president and CEO of the Kaiser Family Foundation, said it was the first time he could remember employers moving so boldly to shift health costs to workers.

"Added health costs for workers means added economic insecurity for working people in tough times," Altman said. He called the move a "recession survival tactic" for struggling employers, who provide coverage for about 157 million Americans.

"It speaks to the pressure that companies are under from the recession," he said.

Over the past five years, workers' share of premiums has increased by $1,300, or 47 percent, Altman said, while overall coverage costs are up 27 percent. Over the same period, wages climbed 18 percent and general inflation rose 12 percent. With health coverage costs growing faster than wages and inflation, weary consumers can't seem to catch a break.

"If premiums and costs continue to be shifted to consumers, households will face difficult choices, like forgoing needed care or re-examining how they can best care for their families," said Maulik Joshi, the president of Health Research and Educational Trust.

Family coverage now costs an average of $13,770 a year, up 3 percent from 2009, the survey found. Employers still absorb the bulk of the costs, paying an average of $9,773 toward the full premium amount. Workers typically pay about 27 percent of the cost for family coverage, but this year they're paying about 30 percent, or an average of $3,997. That's up from an average of $3,515 last year.

Workers with individual coverage are in the same boat. Their average annual premiums spiked more than 15 percent this year - from $779 to $899 - even though the average overall cost for single coverage rose only 5 percent, from $4,824 in 2009 to $5,049 this year. Workers typically pay about 19 percent of the total premium for single coverage.

Even as they pay more, workers are getting fewer benefits. The survey found that 30 percent of employers reduced benefits or increased out-of-pocket costs, while 23 percent raised premiums. Employers also are raising annual deductibles.

Twenty-seven percent of covered workers pay annual deductibles of at least $1,000 before their coverage kicks in. At firms with fewer than 200 employees, it's 46 percent, the survey found.

"Insurance is getting stingier and less comprehensive every year," Altman said.