Average family health plan premiums top $13,000

The cost of single coverage held steady, but deductibles and other cost sharing continued to climb in 2009.

By Doug Trapp — Posted Sept. 28, 2009

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

Family health insurance premiums in 2009 increased by a relatively moderate 5% for the third consecutive year, while premiums for single coverage remained virtually unchanged. But many workers felt a greater impact this year due to the recession and steadily growing out-of-pocket costs.

"To working people and employers, moderation just looks like another year of health care costs going up, up and up," said Kaiser Family Foundation President and CEO Drew Altman, PhD. On Sept. 15, the foundation and the Health Research and Educational Trust released the 2009 version of its Employer Health Benefits Survey, an annual report detailing trends in employer-sponsored health insurance.

Family coverage reached an average of $13,375 in 2009 -- a hike of 5%, or $695 -- while single coverage premiums increased by $120 to reach an average of $4,824 annually, an increase of less than 0.3%.

Although family premiums increased by the same percentage as they have in recent years, workers likely felt the impact more this time around, said Roger Feldman, PhD, Blue Cross Professor of Health Insurance at the University of Minnesota. This year, with inflation decreasing by 0.7%, the difference between the growth of premiums and of inflation was 5.7 percentage points. Last year this "real" increase in premiums was only 1.1 percentage points. Typically the figure stands at two to three percentage points, Feldman said.

Consumers also faced larger deductibles and a significant increase in co-pays this year, according to the report. For example, 22% of all workers with employer-sponsored coverage in 2009 had a general annual deductible of $1,000 or more, up from 18% of workers in 2008. The trend occurred in both small and large firms.

Patients also paid more for office visits. Co-payments for in-network primary care physician visits increased by $1 to reach $20; co-pays for visits to specialists grew by $2 to reach $28. Although small, those hikes were statistically significant, meaning they were outside the margin of error, according to Gary Claxton, lead author of the study and director of the Kaiser Family Foundation's marketplace research.

Altman said continued higher health insurance costs are driving support for health reform legislation in Congress this year. "It's this, really -- the transformation of health into an economic pocketbook issue -- that has fueled the health reform debate."

Senate Finance Committee Chair Max Baucus (D, Mont.) said the increasing costs of health insurance are another source of motivation for him. "This survey provides yet another illustration of the need to reform America's health care system and ensure fiscal security."

The number of employers offering coverage dropped to 60% in 2009, down from 63% in 2008.

A plateau for consumer health plans?

Enrollment in high-deductible health plans with savings options held steady in 2009. Eight percent of workers with health insurance enrolled in these plans, which have deductibles of at least $2,000 for family coverage and which allow enrollees to put pre-tax income into savings accounts for health spending.

For the first time, the percentage of small employers -- those with three to 199 workers -- that offered high-deductible plans with health savings accounts did not increase, according to the Kaiser/HRET report. "Large firms are offering them, but large firms tend to offer a choice of plans. And while they're offering them, their workers are not responding," Claxton said.

Roy Ramthun, MPH, senior health policy adviser to President George W. Bush on health savings accounts, was skeptical that small businesses were dropping consumer-directed plans. Other surveys, focusing on larger employers, found that the number of firms that offered or planned to offer such plans rose more than seven to eight percentage points in 2009, he said.

"This is the first survey that I've seen that suggests there is a slightly different trend going on," said Ramthun, now president of HSA Consulting Services, a Silver Spring, Md., firm specializing in consumer-directed health care. The dip might be explained by smaller firms dropping coverage in general because of the recession, he said.

In addition, PPOs are increasing deductibles and growing to resemble high-deductible plans that offer savings accounts, Ramthun said. The percentage of PPOs with an annual deductible of $2,000 or more grew from 12% in 2006 to 23% this year, the report found, and the trend was even stronger for HMOs and point-of-service plans.

The general trend toward higher-deductible health plans is changing the nature of health insurance, Altman said. "The broader trend is simply the growth of high-deductible health plans. You could also say less comprehensive insurance for people ... particularly for small employers."

Employers have favored increasing deductibles and cost sharing over hiking premiums, but even the latter will probably happen eventually, Altman said.

"A return to the more typical increase rates we've seen over the last 10 years is entirely a possibility," Altman said, adding that 7% to 9% hikes would be typical. "There's absolutely no reason to believe that we've done anything meaningful to deal with the fundamental drivers behind the rates of increase we see in health care costs."

Back to top


HSAs more popular in big business

[download pdf]

Larger employers are increasingly more likely than small businesses to offer high-deductible health plans paired with health savings accounts.

2005 2006 2007 2008 2009
All firms 4% 7% 10% 13% 12%
3-199 workers 4% 7% 10% 13% 11%
200-999 workers 4% 5% 13% 15% 18%
1,000 or more workers 10% 17% 18% 22% 28%

Source: Kaiser/HRET Survey of Employer Sponsored Health Benefits, September (link)

Back to top

Premium increases stay low

Employer-based health insurance premiums for family coverage in 2009 increased by a relatively moderate 5% for the third year in a row. But a drop in the inflation rate means the increase is more significant than it has been since 2004.

Family premiums Inflation
2009 5.0% -0.7%
2008 5.0% 3.9%
2007 5.0% 2.6%
2006 6.0% 3.5%
2005 9.0% 3.5%
2004 10.0% 2.3%
2003 13.0% 2.2%
2002 13.0% 1.6%

Source: Kaiser/HRET Survey of Employer Sponsored Health Benefits, September (link)

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn