The Burden of Health Insurance Premium Increases on American Families
Health insurance premiums for American families continue to skyrocket. A report released by the Kaiser Family Foundation (KFF) on September 15th, reported that the average annual family premium for employer-sponsored health insurance rose to $13,375 in 2009. This represents an increase of 5.5 percent increase in premiums for families in the past year when inflation actually fell by 0.7 percent.
The unrelenting upward trend in health care premiums is evident at the state level as well. Health insurance premiums are highly variable across the country, with states experiencing premium growth of between 90% to nearly 150% over the past decade. These differences lead to inequities for families and businesses as well as underlying differences in the uninsured across states. However, across all states, the rise in health insurance premiums is burdening families and threatening our economy. In every state, premiums have increased faster than wages and in every state, family budgets are consumed by an increasing share of healthcare premiums.
This report looks at trends in premiums for American families over the last decade at the state and national level. Additionally, it reviews some recent actions by State Insurance Commissioners to rein in unwarranted premium increases.
According to the Kaiser/HRET survey, the average cost of a family health insurance policy increased from to $13,375 in 2009; up from $12,680 in 2008 (Exhibit 1). This 5.5% increase came at a time when, amidst the worst recession since the Great Depression, inflation was actually negative. (Exhibit 1)
Fair access to affordable insurance will be ensured by the elimination of individual underwriting rules. Insurance companies will not be allowed to discriminate based upon health status or gender. Additionally, insurance companies will not be allowed to charge prohibitively high prices to high-risk individuals or drop coverage if a person gets sick. Health insurance reform significantly improves the current system, in which a person who is diagnosed with a new illness can see their insurance premiums go up by as much as 50% or cancelled the following year. Insurance market reforms will further improve stability by eliminating yearly and life-time limits on how much insurance companies cover if you get sick. Together, these reforms create peace of mind and the stability and security that Americans need and deserve, especially in our current tough economic times.