The study, Realizing Health Reform’s Potential, from The Commonwealth Fund, asserts that if the reforms slow the current annual health premium cost growth rate by 1% in all states, by 2020 annual savings for employer-provided family coverage could average $2,323 or $3,403 if the savings is 1.5%. Savings from family coverage premiums would range from $2,866 in Arkansas in 2020 to $3,847 in Massachusetts.
Researchers declare: “Employers could use these savings to increase wages, contribute to retirement savings plans, or add jobs.”
The report notes that the average premium for a family plan in the employer-provided health market was $13,027 as of 2009, ranging from $11,000 to more than $14,000 across the states. If insurance premiums for employer-sponsored health plans in each state continued to grow at the same average annual rate seen from 2003 to 2009, the average premium for family coverage would skyrocket to $23,342 by 2020—a 79% percent hike.
The study also notes that deductibles for workplace health plans rose sharply in almost all states, increasing an average of 77% from 2003 to 2009. In addition, more workers are paying deductibles; 74% faced a deductible in 2009 compared with 52% in 2003. Notably, deductibles are up for people working in larger firms (50 employees or more) as well as small firms (under 50 employees). In both sectors, the increase in deductibles per person averaged 80%
Commonwealth researchers say if premium growth were to slow to 1% below the projected national growth rate, the cost of family coverage would drop an average of $995 annually by 2015. Annual savings for families and employers would increase to $2,323 by 2020. Average savings on family coverage premiums would range from $1,956 in Arkansas in 2020 to $2,625 in Massachusetts.
The stakes are high: the dramatic runup in health care premium costs for employer-sponsored health plans have had a significant impact on Americans’ ability to save for retirement and hurt employers’ efforts to boost wage rates, the study says.
“Such a rapid increase in the cost of employer-sponsored health benefits has forced difficult choices at workplaces across the country,” Commonwealth asserts. “Studies indicate that slower growth in wages and lower savings for retirement (worker and employer contributions) have been part of the tradeoff to preserve health benefits. Despite such tradeoffs, the monthly cost of premiums paid by workers and their families is up, consuming an ever-greater share of any wage increases they might receive.”
The Commonwealth researchers write: “The past two decades provide strong evidence that cost pressures will continue absent a significant change in the way private insurance and markets function. The (health reform bill) lays a foundation for such change and provides a platform for further reform.”
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