Short Takes On News & Events

Health Insurance Premiums Soar In All 50 States

By Jenny Gold

November 17th, 2011, 5:53 AM

Chart by The Commonwealth Fund

Another day, another piece of bad news about health insurance premiums.

A state-by-state analysis finds that from 2003 to 2010, premiums for family coverage increased an average of 50 percent. At that rate, the average family premium would balloon to nearly $24,000 by 2020, according to the study, which was conducted by The Commonwealth Fund, a nonprofit health policy foundation.

At the same time, the annual cost to employees increased by 63 percent, as businesses required workers to pick up a greater share of health insurance costs.  Per-person deductibles increased an average of 98 percent.

Mississippians fared the worst, with family premiums increasing 70 percent. People in Idaho felt the least pain, on average, with only a 33 percent increase in the same time period.  In all states, insurance premiums rose faster than incomes.

“Whether you live in California, Montana, or West Virginia, health insurance is expensive” said Commonwealth Fund Senior Vice President Cathy Schoen, lead author of the report, according to the press release.

Commonwealth created a cool interactive map of the country if you want to see the results from your state.

The study analyzed private sector health insurance premiums and deductibles for people under 65, which came from the federal government’s annual survey of employers for the Medical Expenditure Panel Survey.

In September, The Kaiser Family Foundation’s annual survey of thousands of employers found that the average annual premium for employer-sponsored family coverage in 2011 was $15,703. (Kaiser Health News is an editorially-independent program of the foundation).

5 Responses to “Health Insurance Premiums Soar In All 50 States”

  1. WellRead29 says:

    I work for a (locally large) carrier. Have access to some hard numbers, specifc and local.

    The fastest drivers of medical trend (and therefore premiums) in our state (La.) in order of impact on premiums are:

    1. The unit costs of inpatient hospital stays
    2. The spend on biologics, both unit costs and utilization
    3. The utilization of outpatient surgery (not unit costs, but volume).

    If you ask hospital negotiators about #1, they point directly to how much money they are losing providing medical care for the 60% of their patients who are government insured (both Medicaid and Medicare). New cost shifting (which of course the President’s economists and leading members of Congress insist does not exist) and declining volume of profitable patients (meaning privately insured patients, of course) has led to some very large rate increase requests by hospitals, with even bigger ones on the horizon. Heaven help us when they form ACO’s and get anti-trust exemptions to negotiate as blocks.

    The unit costs and utilization of biologics (specialty or injectable drugs) seems to have no caps, and no limits on upside potential. To use this story’s dates, in 2003 biologics were 3% of our total drug spend, today they are 20% and rising.

    Claims for the 3 areas above have gone up far more than 50% since 2003. Other facets of medical care have held steady, overhead is up about 10% since 2003 (salaries, taxes, operational expenses).

    Brings up an important question: What will hospitals do in the “flyover” states like us who have very low Medicare reimbursement when private insurance has been priced out of reach for everyone and Medicare becomes their BEST payer?

    Not going to be pretty.


  2. A. Jaquay says:

    A simpler view without statistics…and you’ve heard it before. Healthy individuals continue to drop out of health insurance coverage. That’s a huge driver of escalating premium costs, as those most likely to need medical intervention scrape up premium to remain in their plans. And use them they do! And then those who’ve dropped out, begin to experience costly medical events…and THAT cost must be borne through even greater premium increase. Until ALL in the US have coverage (by whatever label you wish to call it), premiums will rise and rise…and rise…

  3. Tony says:

    RE: Health Insurance Premiums Soar In All 50 States

    As long as the fox controls the hen house, we will continue to see heath care costs skyrocket. Why would insurance companies care about any rise in premiums? Why would providers care? Why would Big Pharma care? They are in control of our health care system. Consumers are told, if you don’t like that fact that we are in control, then stop trying to participate and die! No other industry has such absolute control of the life or death of the American consumer. Insurance companies, health care providers and drug makers collude to force the consumer to pay unsubstantiated double digit percentage increases every year. These increases are never questioned. State health departments and state insurance commissioners wink at these increases. Meanwhile we have 50 million plus Americans uninsured and about 25 million more underinsured, and those numbers keep growing. The Simpson/Bowles plan calls for a robust public option. We will never force competition for consumers dollars until we offer a robust public option. Maybe Wal-Mart will bring the competition we need?

  4. Absurdity says:

    What do people expect from a capitalist system that rewards greed? Lower premiums? It isn’t going to happen. Of course there are those that suggest we should shop around. Shop around for what? Each insurer commits to paying so much for a procedure and if a provider doesn’t agree to the reimbursement then that provider no longer accepts the insurance. So going from hospital to hospital is going to get your the same basic price. The only way to really “shop around” would be to change insurance companies for each procedure and I’m not convinced that’s going to save you any real cash either.

    Use pharmaceuticals as an example. There are websites that will list the prices for a medication for each pharmacy within a zip code. Prices rarely are any more than a nickel different regardless of who fills them.

    To recap. Capitalism is designed on getting the highest price for the least amount of service so what do you really expect to get? It’s just like a gas station where prices never differ much more than a nickel from station to station. Businesses learned long ago that a price war is the quickest way to lose profits. It’s better to work with your competitors than against them. After all you can only eliminate so many competitors or you will soon find yourself being divested by force because you have monopolized an entire industry.

    Since our government refuses to enforce our anti-trust laws we have to suffer to the very end with extremely high prices and poor goods and services and then maybe, just maybe when the new businesses are broken out their desire to survive might cause an initial price war bringing the prices down to a more reasonable level; similar to what happened when Ma Bell was broken up. But do you really want to wait, or can you wait that long when the product is health care?

  5. We’ve just got our annual small business increase. 20%. Yet large businesses are seeing 6% in crease. That suggests to me a) small business pool going into a death spiral that may or may not be rescued by the exchange in 2014, and b) health plans trying as hard as they can to ramp up their revenue and pricing before 2014. Which means this can only be solved by universal coverage and cost controls which are what the two previous commentators advocated