Health insurance premiums in Pennsylvania have risen faster than the national rate since 2003, faster than 28 other states for single coverage and faster than 37 other states for family coverage, according a study released by the Commonwealth Fund.
In the same time frame, total health insurance premium costs have grown statewide from 14.4 percent of average household income to 19.7 percent for single coverage, and from 13.8 percent to 20.2 percent for family coverage. And the share of that premium being paid for by employees rather than employers has risen, from 15.4 percent to 22.5 percent for single coverage and from 20.3 percent to 24.6 percent for family coverage.
Add the fact that, on average, insurance policy deductible amounts have more than doubled since 2003, and the bottom line is stark, lead report author Cathy Schoen said during a teleconference Tuesday.
Workers have been trading off better wages to hold onto health insurance, said Schoen, senior vice president for policy, research and evaluation at the Commonwealth Fund. Employers moderate their own costs by asking or requiring workers to pay a higher percentage of the premium, and that share has increased faster than the cost of the premium itself.
The average deductible has increased 134 percent in Pennsylvania for single coverage, higher than the national average of 117 percent, while the state average for family coverage has climbed 99 percent, slightly below the national average increase of 106 percent.
Even when employers still cover the bulk of the cost, the rapid increases mean less money for wages, Schoen and Commonwealth Fund President Karen Davis added.
The report argues that the Affordable Care Act, dubbed Obamacare by critics, is a good foundation for curbing escalating health costs. Data on the national rate of premiums in 2012 indicates cost increases have begun to slow, Davis said.
The law limits the percentage of premiums that can be used for administration, sets standards – or a floor – for minimum coverage, and sets up insurance exchanges designed to let small employers and individuals get a better price on insurance by pooling resources and spreading risk, Davis said.
But governments, employers, insurers and health care providers must work together to build on that foundation. Slowing cost growth requires focus on the total health system, the report contends.
Premiums have become so steep and increases so rapid that cutting projected premium increases by 1 percent would save an average of $700 per year for single person coverage by 2020, and $2,029 for family coverage, the report estimates.