Middle class faces steeply rising premiums

Without a change in course, middle- as well as low-income families might eventually be priced out of the health insurance market.

If premiums for employer-sponsored insurance grow in each state at the projected national rate, then the average premium (constant dollars) for family coverage would rise from $12,298 (2008 average) to $23,842 by 2020 — a 94 percent increase.

Further, between 1999 and 2008, employer-sponsored family health insurance premiums rose by 119 percent nationally, while median family income rose by 29 percent, according to the U.S. Census Bureau, Current Population Survey.

If national health reform were able to slow premium growth by just 1 percentage point in all states, by 2020 employers and families together would save $2,571 per premium for family coverage, compared with the projection. By 2015, with a 1.5 percentage point slowdown, families could save $1,682. The savings would more than double — to $3,759 — for 2020.

In 2003, North Dakota had the lowest premiums, while the District of Columbia had the highest. But Idaho had the lowest premiums in 2008, and it should continue to hold that place in 2015 and 2020. Massachusetts will have the highest.

Projections for family premiums in 2020 range from $21,009 in Idaho to $26,730 in Massachusetts.

These findings are presented in the Commonwealth Fund’s August report, “Paying the price: How health insurance premiums are eating up middle-class incomes.”

Premiums for family coverage, 2003, 2008, 2015, 2020

Projected annual savings in family premiums, 2015 and 2020

*Premium estimates for 2015 and 2020 based on CMS Office of the Actuary, National Health Statistics Group, national health expenditures per capita annual growth rate.

Source for both charts: The Commonwealth Fund. Data Brief: Paying the price: How health insurance premiums are eating up middle-class incomes. August 2009

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