Since 2003 across the country, health insurance premium increases have outstripped wages, deductibles have doubled and employees have shouldered an ever-larger portion of those costs, according to the report from the Commonwealth Fund.
The Affordable Care Act is already helping to slow the rate of increase and will be important in the future in making health care less expensive for those with employer-sponsored insurance, officials with the group said.
Between 2003 and 2011, the average family health insurance premium increased 62 percent, with Georgia rates right at the national average and premiums in South Carolina shooting up by 71 percent, according to the report. Median family incomes increased about 10 percent over that period, and inflation increased by 18.5 percent, the report notes.
The higher premiums and costs resulted in South Carolina families devoting a quarter of their income – 25.1 percent – to getting care and maintaining insurance, behind only West Virginia and New Mexico.
In Georgia, it would account for 21.6 percent of median family income.
“In effect, workers that have jobs with benefits have been trading off wage increases to hold onto health insurance for the past eight years,” said report lead author Cathy Schoen, a senior vice president at Commonwealth.
And many were not even able to do that – between 2008 and 2010, the percentage of people with employment-based health insurance declined from 58.9 percent to 55.3 percent as 9 million people lost jobs with health benefits, the report said. As a result of the eroding value of insurance they are able to get, adding the underinsured to the insured would equal 81 million people in 2010, up from 61 million in 2003, the report noted. In fact, if health care costs and premiums were deducted from income, another 3.3 percent, or 10 million more Americans, would be added to the poverty rate, the report said.
The Affordable Care Act attempts to address that by mandating the amount of premium dollars insurance companies must spend paying actual medical costs – either 80 percent or 85 percent, depending on whether it is small- or large-group insurance – or companies face paying a refund. Earlier this year, the first year the rule was enforced, 12.8 million got rebates totaling $1.1 billion, including 244,000 in Georgia who got $19.8 million. Under a new rule that allows young adults to stay on their parents’ insurance up to age 26, the rate of uninsured in that age group dropped 4 percent in 2011, according to the report. Commonwealth Fund President Karen Davis said premiums are already down this year and Schoen noted that administrative costs are also dropping.
“The private market has been responding to the new standards,” Schoen said.
The group, a private nonpartisan devoted to pushing for a high-performing accessible health care system, called on payers and providers to work together to lower costs and eliminate waste to make health care costs more reasonable.