"These rapid premium increases aren't sustainable for families or employers," said Commonwealth Fund President Karen Davis. "If we craft patient-centered reform that focuses on improving quality and efficiency and bending the cost curve, the insured in every state stand to benefit. We could assure coverage and, over time, make more money available for wages, retirement, and other family needs."
The report found that insurance premiums have been rising much faster than income across states. As a result, by 2008 total premiums including employee and employer shares equaled or exceeded 18 percent of the average household income for the working age population in 18 states, compared to just three states in 2003. In three statesMississippi, Tennessee and West Virginiafamily premiums averaged 20 percent or more of middle household incomes for the state's under-65 population. The stress on businesses and families is particularly acute in Southern and South-central states, where premiums are often high, yet incomes are lower than national averages. In addition, employees are often paying more for less, because as costs rise employers have increased patient cost-sharing while limiting benefits.
The authors note that a health industry coalition recently has pledged to slow the rate of cost growth by 1.5 percent annually. Further, estimates indicate that payment and system reforms, including the choice of a public insurance plan to compete with private plans, could reduce projected spending by $2 trillion to $3 trillion between 2010 and 2020--a reduction of 1 to 1.5 percent in annual growth rates.
The authors conclude that if current trends continue, middle and lower income families could end up priced out of the health insurance market. In contrast, national reforms present an opportunity to put families on a path to rising incomes and health security.
|Contact: Mary Mahon|