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Sep 16
2009

Coming: $30K health-care premiums

Posted by RedConn in John Goffhealth insurancehealth carebenefits

RedConn

To all those sign-toting. teabaggers out there who aim to derail meaningful health-care reform: if you succeed, you'd better start socking away some serious dough.

The Kaiser Family Foundation this week released its latest look at employer-provided medical benefits. What Kaiser found was hardly surprising -- but worrisome nonetheless.

According to the research, the annual premium for an employee-sponsored plan for a family now averages a whopping $13,375. That's a 5 percent bump up from the rate in 2008. And while 5 percent doesn't sound outrageous -- at least not by normal health insurance rate-hike standards -- it's miles above the current rate of inflation, which is close to zero.

What's more, Kaiser found that the average cost of an employer-sponsored family medical plan has shot up 131 percent over the past decade. Wages during that period? They've gone up 38 percent. Inflation? 28 percent.

Indeed, the average worker now picks up about 27 percent of the cost of a family plan. Granted, that's not much different than it was ten years ago. But with health-insurance costs skyrocketing, that worker kick-in now comes close to $300 a month (or around $3,600 a year). In 1999, that figure was closer $130.

Meanwhile, the employer portion of the tab has jumped dramatically, from $4,200 annually in 1999 to nearly $10,000 this year.

To rein in medical expenses as best they can, employers have zeroed in on cost-sharing. Plan deductibles, for one thing, have risen dramatically. The average annual deductable for an employer-sponsored family plan in an HMO is now $1,524. In 2006, it was less than half that ($751).

Likewise, the average annual deductible for a point-of-service plan for a family is $2191, compared to $1,227 in 2006.

You can see where this is headed. Without an effective overhaul of the medical system in the U.S., workers can expect jumbo deductibles and jumbo contributions - and not that far off, either.

As Kaiser's CEO pointed out, if health-insurance premiums go up by about 6% over the next ten years - and that's conservative - the average premium for a family plan in 2019 will be over $24,000 a year. Plug in a higher multiplier - say 8.7 percent - and you end up with an average annual premium for a family plan of over $30,000.

For those who say premiums won't rise 8.7 percent annually for the next ten years, consider this: they have the past ten years.

And where does that leave our tea-baggers? Shelling out a heck of a lot more of their own money for health insurance -- a fact that seems lost of many of them.

Indeed, if workers continue to pick up about 27 percent of the cost of their premiums, they could be paying more than $8,000 a year - or close to $700 a month.

Put that on a placard.        

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