Sharp Rise in Health Care Premiums; White House Responds to Criticism

President of Kaiser attributes rise in premiums to company spending

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By Katherine Weber, Christian Post Reporter
September 28, 2011|10:34 pm

Health insurance premiums jumped nine percent in 2011, nearly three times the rate of inflation, according to a report released Tuesday.

The study showed the average employer-sponsored family coverage was over 15,000 in 2011, a nine percent increase from last year.

Average health care premiums rose to $10,944 for employers and $4,129 for workers for a total of $15,073.

Kaiser Family Foundation and the Health Research and Educational Trust released the report, which neglected to state whether the premiums would continue to rise.

However, it did note that the premiums have more than doubled since 2001.

“This year’s 9 percent increase in premiums is especially painful for workers and employers struggling through a weak recovery,” Kaiser President Drew Altman said in a statement.

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In 2010, premiums were at three percent for families and five percent for singles. According to Kaiser, that number has risen a startling 113 percent over the last ten years.

“The survey found that insurance premiums rose just about the same amount for single people - 8 percent– as the 9 percent increase for families, which suggests that this change required by the health reform law may not have played much of a role in the rising costs of insurance,” Leighton Ku, director of the Center for Health Policy Research at The George Washington University told ABC News.

Insurance companies have continued to receive pressure from employers and users to cut costs, especially after the promise of the Affordable Care Act, signed by Obama in 2010.

The Act was created to implement health care reform from 2010 to 2014. One of the main stipulations of the Act was to decrease the cost of health care, making it affordable to employees of all salaries.

Altman contends that this Act has had little effect on the increase in premiums, especially because the Act has until 2014 to produce results.

The White House released a statement Tuesday refuting claims that the rise in premiums was a direct result to the new health care regulations.

According to the statement, 2011 premiums were set in 2010 “when insurance companies thought medical costs would be significantly higher than they turned out to be.”

"Insurance companies that want to raise premiums for 2012 by more than 10 percent will have to publicly justify their rate hikes, and a growing number of states have the power to reject unjustified premium hikes,” read the statement.

"Additionally, insurers are required to spend at least 80 percent of your premium dollars on medical care, rather than advertising, overhead and bonuses for executives. If they fail to meet that standard, they will be required to provide a rebate to their customers."

The survey was conducted among large and small businesses that provided health coverage to employees – a pool including 150 million Americans.

The release of this report may serve as a hot topic of debate in the upcoming presidential election.

 

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