- Associated Press - Tuesday, September 27, 2011

INDIANAPOLIS — The cost of employer-sponsored health insurance surged this year, snapping a trend toward moderate growth, but experts say these increases may slow again in 2012.

Annual premiums for family coverage climbed 9 percent and surpassed $15,000 for the first time, according to a report released Tuesday by the Kaiser Family Foundation and the Health Research and Educational Trust. Premiums for single coverage rose 8 percent compared with 2010.

That compares to increases last year of 3 percent and 5 percent for family and single coverage, respectively. The study shows that premiums for both family and single coverage have more than doubled since 2001, while worker wages have risen 34 percent.

Kaiser CEO Drew Altman said a number of factors may have played a role in this year’s percentage jump. He noted that health care costs continue to rise, and insurer profits and the health care overhaul also have some impact.

The overhaul, which Congress passed last year, aims to eventually cover millions of uninsured people. Kaiser said initial provisions of the law contributed between 1 and 2 percentage points to this year’s premium hikes, which is about what many insurance analysts and benefits experts expected.

Companies and workers split premiums for employer-sponsored coverage, the most common form of health insurance in the U.S., and employers generally pick up 70 percent of the bill or more.

Businesses likely reacted to these cost increases by giving a smaller raise or no wage increase to their workers, said Helen Darling, CEO of the National Business Group on Health, a nonprofit organization that represents large employers on health care issues.

“[Workers] basically are giving their pay raise to the health system,” said Miss Darling, who was not involved with the Kaiser study. “It’s really bad news.”

The annual study was conducted earlier this year and includes results from more than 2,000 companies nationwide. It also indicates that many more families than previously believed have benefited from a popular provision in the overhaul that allows young adults to stay on a parent’s health plan until they turn 26.

Kaiser asked employers how many people were added to their insurance plans because of this provision and estimated that 2.3 million young adults enrolled. Last week, the government reported that the number of uninsured young adults had dropped by nearly 1 million since the law took effect, a finding independently corroborated by Gallup.

The difference isn’t necessarily a contradiction.

The Kaiser survey may have counted young adults who were covered by a more expensive policy and switched to their parent’s plan to save money.

Many workers are about to receive notices from their employers regarding health insurance coverage for next year. Mr. Altman said he cannot say whether this year’s increase represents a bad omen for 2012 or if it is just a one-year blip.

AP writer Ricardo Alonso-Zaldivar contributed to this report.



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