Insurance Premiums Rise, But Not for Employees

However, employees are not paying more – and those with single coverage are actually paying less than they did in 1996.

The study found that premium costs for employers with less than 200 employees rose 10.3%, compared with larger employers, who saw increases of 7.5%.  In 1999 the average premium rose 4.8%.

Premium Pricing

The average monthly premium for employer-sponsored health insurance was $202 for single and $529 for family coverage, according to the 2000 Employer Health Benefits Survey by the Kaiser Family Foundation and Health Research and Educational Trust. 

Employees paid about 14% of the premium for single coverage ($28/month), down from 21% in 1996.

Employees paid just $138/month for family coverage, roughly 27% of the total premium, comparable to 1996’s 28% rate, but down significantly from 32% last year. 

Despite the rate of increase, the number of employers offering health insurance increased to 67% last year from 54% in 1998.  Sixty percent of those with less than 10 employees now offer health insurance compared with 55% two years ago.  Ninety-nine percent of employers with more than 200 employees offer health insurance.

The study found that 80% of employees are eligible for coverage, and 81% of those eligible do sign up.

The most common reason cited by employers for employees not accepting coverage is that they have coverage elsewhere (72%), or cannot afford it (11%).

Drug “Bust”

Two-thirds of employer respondents said higher spending on prescription drugs contributes “a lot” to health insurance premium increases. 

Still, nearly all (95%) of health plans (HMO, POS, PPO) offer prescription drug coverage, compared with just 87% of conventional plans. 

The 2000 Employer Health Benefits Survey was drawn from a survey of 3,402 randomly selected public and private employers, ranging from firms with as few as 3 workers to those with more than 300,000.

The survey is at http://www.kff.org/content/2000/20000907a/