Insurance Increases 10% in Last Year, but NOT Because of Obama Administration

October 4, 2011

A study released last Tuesday revealed that company-provided health care coverage, one of the largest costs of both businesses and households in the US, increased by nine percent over the last year, even with a slow economy. More specifically, the average cost for employer-provided family health insurance is now $15,073 a year, which cost has more and more businesses dropping coverage for employees.

The study, an annual report released by the Kaiser Family Foundation also found that only one or two of those nine percentage points can be pinned on the 2010 health care reform act which allowed families to keep grown children on their policies until the age of twenty-six and increased coverage for preventive medical services.

Moreover, the study reveals that over the last ten years the cost of employer-provided health insurance has increased by 113%, while the average increase in wages over the same period of time was only 34%, and inflation only increased by 27%. According to the study, the employer contribution to those insurance costs is still more than double the employee share, but worker contributions increased by a whopping 131 percent over the last decade.

Kaiser’s study also revealed that a greater number of companies and workers were agreeing to pay higher deductibles (the portion the insured parties pay out-of-pocket when obtaining medical treatment, before insurance kicks in) in order to cap increases in premiums.

While 99% of companies with more than 200 employees continue to provide health benefits, in 2011 only 59 percent of smaller companies offered health benefits to their workers, as opposed to 67% of small companies in 2001.

Speaking to the press, Drew Altman, chief executive of the Kaiser Family Foundation explained, “Critics of the national health reform law passed in 2010 like to blame everything but the weather on ‘Obamacare,’ but… regardless of how you feel about the Affordable Care Act, its effect on premiums this year is modest.”

Altman added, “While the conventional wisdom is that private insurance does a better job of controlling costs, the opposite is true.”

White House deputy chief of staff Nancy-Ann DeParle also weighed in on the Kaiser report, calling it “a look backwards,” and stating that the increase in premiums would slow significantly over the next year. In a post on the White House blog, she said that the increase was based on assumptions made by insurers in 2009, that medical care costs would spike upward and that President Obama’s Affordable Care Act would add to insurer costs.

“In the end,” she wrote, “both assumptions were wrong — but insurance companies still charged high premiums and earned impressive profits.” She also wrote that, “Key Affordable Care Act policies are starting to take effect that make insurance more affordable.”