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Health Care Reform:

Health Insurance & Affordable Care Act

Health Care Costs Rise Again for Workers, Firms

Increase in Family Premiums Make Employees 'Feel Pain' Amid Reform Debate

Employees Feel the Pinch continued...

And Kaiser’s Altman said that if health premiums continue to rise by the recent average growth rate of 6.1%, the cost of family coverage would reach $24,180 by 2019.

The employer survey, conducted between January and May, drew complete responses from 2,054 firms. One of those firms, Hepner Air Filter Service of Cleveland, said increases in its health costs have averaged about 12% in recent years. Eric Hepner, the firm’s owner, says he does not charge his 15 employees any premium for their health insurance.

But when the union contract comes up for negotiation later this year, Hepner says, health care will be a prime topic.

“I don’t know if I can absorb any more increases,’’ Hepner says. 

If the firm’s health insurance cost rises again, he says, workers may have to start paying a portion of the premium, or the benefit plan may be changed to reduce spending.

The survey shows that 60% of firms offer health coverage to workers. Yet just 46% of employers with three to nine workers provided benefits.

Small Firms Suffering

Smaller firms have a higher share of workers in high-deductible plans, the survey reports. It shows that 40% of covered workers in firms of fewer than 200 employees had deductibles of at least $1,000 for single coverage, up from just 16% in 2006. Just 13% of employees in large firms this year had a deductible of that size.

Small employers generally lack the bargaining power of large companies in negotiating affordable rates with health insurers.

Many small firms have seen double-digit percentage increases in health costs, says Amanda Austin, director of federal public policy for the National Federation of Independent Business. Smaller companies often are forced to raise deductibles to keep insurance affordable, she says.

The cost of insurance is a top priority for her organization’s members as the health reform debate continues, Austin says.  “We can’t just walk away from this problem,’’ she said. “It’s on an unsustainable path.’’

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