Paying the Price: How Health Insurance Premiums Are Eating Up Middle-Class Incomes--State Health Insurance Premium Trends and the Potential of National Reform

August 20, 2009 | Volume 17

Authors: Cathy Schoen, M.S., Jennifer L. Nicholson, M.P.H., and Sheila D. Rustgi
Contact: Cathy Schoen, M.S., Senior Vice President for Research and Evaluation, The Commonwealth Fund, cs@cmwf.org
Editor: Christopher Hollander

Overview

The rapid rise in health insurance premiums has severely strained U.S. families and employers in recent years. This analysis of federal data finds that if premiums for employer-sponsored insurance grow in each state at the projected national rate of increase, then the average premium for family coverage would rise from $12,298 (the 2008 average) to $23,842 by 2020—a 94 percent increase. However, if health system reforms were able to slow premium growth by 1 percentage point in all states, by 2020 employers and families together would save $2,571 per premium for family coverage, compared with projected trends. If growth could be slowed by 1.5 percentage points—a target recently agreed to by a major industry coalition—yearly savings would equal $3,759. The analysis presents state-by-state data on premium costs for 2003 and 2008, as well as projections, using various assumptions, for costs in 2015 and 2020.

Citation

C. Schoen, J. L. Nicholson, and S. D. Rustgi, Paying the Price: How Health Insurance Premiums Are Eating Up Middle-Class Incomes—State Health Insurance Premium Trends and the Potential of National Reform, The Commonwealth Fund, August 2009.

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