10/1/11

American private health care insurance premiums up 113% in ten years

The premiums for the private employer based health care insurance increased 9% in 2011, according to a new study from Kaiser.   In the absence of a public plan, this is the main way non-elderly Americans get insurance, with about 150 million covered.  


While that increase is significantly higher than the last few years, it is in line with the trend over the last ten years, which saw premiums for family plans increase 113%.   The workers' share of the premium has increased by even more: 131%.   That compares with wage increases of 34% on average (and that average includes the wealthy, who have gotten most of the wage increases).  


Family health care premiums hit the (incredible) level of $15,073 (US) annually.   On average, workers pay $4,129 and employers pay $10,944 toward those annual premiums.


There has been a lot criticism about the ten year agreement to increase the Canadian federal government's transfers for health care 6% annually.  But over ten years that would be 34% less than the 113% increase in private US premiums.  Ontario Ministry of Health & LTC spending has increased at a slightly faster rate than the 6% federal escalator (averaging 6.6% over the last ten years), but still far short of US health care premiums.   If the Ministry got the same  percentage increase as US health care premiums over the last ten years, the taxpayers would have to come up with another $11 billion annually.  


Those contemplating more private health care for Canada, should look at the American experience to see what awaits.  


Indeed, the 113% increase in US private insurance premiums has gone hand in hand with decreasing coverage, not just in terms of who gets covered, but also in terms of what gets covered by insurance . More on that tomorrow.  



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