Health insurance premiums rose modestly this year

The cost of employer-sponsored health insurance rose modestly again this year, but researchers predict a return to bigger increases that may eventually produce crippling premiums if left unchecked.

Meanwhile, more workers with single coverage are facing high-deductible plans that make them pay $1,000 or more out of pocket before coverage starts, according to a report released yesterday by the Kaiser Family Foundation and the Health Research and Educational Trust, a nonprofit research organization affiliated with the American Hospital Association.

The average annual premium -- the amount charged for a fully insured policy -- rose 5 percent for the third straight year to surpass $13,000 for employer-sponsored family health coverage.

Employers picked up about 74 percent of that cost, while workers paid the rest. Single coverage remained relatively flat at an average of $4,824, with employers paying 84 percent.

The 2009 increases represent much smaller growth than just a few years ago. Annual premiums increased anywhere from 10 percent to 13 percent from 2000 to 2004.

But the 2009 numbers still outpaced inflation, which actually fell less than 1 percent.

Kaiser Foundation CEO Drew Altman said the slower growth likely will not last. "We've historically seen these peaks and valleys before, and we always have a bounce-back effect," he said.

Experts say growth in premiums may be slower due to the recession and the possibility of health-care reform, both of which make it harder for insurance companies to increase prices. It also may be affected by growth in high-deductible plans, which generally come with lower premiums, and wellness programs that help employees lead healthier lifestyles in an attempt to pare medical costs.

But Altman said officials haven't seen anything meaningful done to address big drivers behind medical cost increases, such as advances in expensive medical technology.

He expects premium increases to return to more typical growth of 7 percent to 9 percent annually.

If annual premiums for family coverage grow by an average of 8.7 percent per year over the next decade, as they did from 1999 to 2009, they will increase to more than $30,000, Altman predicted.

Premiums track directly with the cost of medical care, said Robert Zirkelbach, a spokesman for the insurance industry trade group America's Health Insurance Plans, which was not involved in the study.

"In order to make health-care coverage more affordable for families and small businesses, policymakers need to address the underlying cost drivers," he said.