California Health Premiums Rise 11.4% in 2004

December 22, 2004 (PLANSPONSOR.com) - Health premiums for Californian workers rose 11.4% in 2004, less than last year's 15.8% but still slightly above the national average.

According to the 2004 California Employer Health Benefits Survey, the average Californian worker paid $2,580 for family coverage in 2004, up 5% over last year, according to Washington-based legal publisher BNA. Single-person coverage was $474, up 13% over 2003. The total cost of a family policy in California for 2004 was $10,013, and for a single-person policy, $3,685. The average worker’s share came to 27% for family and 13% for single person coverage, down slightly from last year for both.

This 11.4% increase is slightly above the national average of 11.2%, and over six times above the state’s inflation rate of 1.7%.

For the first time in California, the cost for a family preferred provider organization (PPO) plan exceeded the national average by 15%, the survey showed. Health Maintenance Organization (HMO) plan premiums are almost 30% lower for single-person plans than PPOs; however, PPOs increased their market share from 29% last year to 36% in 2004.

The percentage of employers in the Golden State that offer insurance to full time workers remained about the same as last year at 67%. Part-time workers, however, are far less likely to receive coverage, with only 20% of employers offering such workers coverage.

Small firms are more likely to use high-deductible plans than large plans (18% to 8%), according to the survey. Almost 81% of workers are in plans that use tiered cost sharing and offer incentives for generic drug use.

California has recently attempted to help reduce health care costs for employees. Along with the Presidential choice, California voters went to the polls on Proposition 72, a measure that related to whether California should force large companies such as Wal-Mart to either provide affordable health insurance for their workers or pay into a state health insurance pool (SeeProposition on Company Health Coverage Waits on California Ballot ). In a close vote, however, the measure failed.

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