Premium costs for family health insurance in California increased by 52% from 2003 to 2010 and consume a larger share of residents' income, according to a study by the Commonwealth Fund, the San Francisco Chronicle reports (Colliver, San Francisco Chronicle, 11/17).
For the state-by-state analysis, researchers examined employer data from a federal survey and calculated the average premiums for private group plans (Conaboy, Boston Globe, 11/17). Researchers compared the insurance costs with U.S. Census household income data (Blesch, Modern Healthcare, 11/17).
According to the study, the average annual family health insurance premium cost in California rose from $9,091 in 2003 to $13,891 in 2010.
Last year, premium costs amounted to 21.5% of income for Californians, up from 14.9% in 2003.
The study also found that between 2003 and 2010, the annual amount California workers contribute toward their health insurance rose by 121% for individuals and 68% for families (San Francisco Chronicle, 11/17).
Between 2003 and 2010, premiums for employer-sponsored health insurance increased by a nationwide average of 50%. The report found that annual premiums increased in every state during that time period from 33% in Idaho to 70% in Mississippi (Quinton, National Journal, 11/17).
Average annual premiums for family coverage were $13,871, with the average annual employee share at $3,721 in 2010, up from $2,283 in 2003 (Bristol, CQ HealthBeat, 11/17).
The report found little correlation between a state's cost of living and its average premium rates. Premiums in New Mexico and West Virginia were among the highest, despite those states' lower-than-average cost of living. The District of Columbia had the highest average annual premiums, with families paying $15,206 and individuals paying $5,644, an increase of 41% and 51%, respectively.
The report found insurance premiums are taking up a larger share of individuals' and families' incomes. In 2010, no states had average premiums that totaled less than 14% of median income, compared with 13 states in 2003. Further, health insurance premiums in 2010 accounted for 20% or more of median income for 62% of U.S. residents under age 65 (Aizenman, Washington Post, 11/17).
Health Reform Law Helps Slow Premium Increases
The report estimates that the federal health reform law will help reduce premium costs by an average of 1% to 1.5% annually over the next 10 years through "a combination of insurance market reforms, payment incentives and delivery-system changes" (National Journal, 11/17).
Slowing premium increases by just 1% would save the average family $2,161 annually, according to the report (Modern Healthcare, 11/17). Further, the report found that without implementation of the federal health reform law, average annual family premiums would reach about $24,000 by 2020 (CQ HealthBeat, 11/17).
For additional coverage on the Commonwealth Fund's report on the increase in health insurance premiums, see today's feature article.