Increases in health insurance premiums continue to outpace workers’ raises, with the lowest-paid employees facing the biggest potential financial headaches.
Insurance premium increases have been modest in recent years compared with the double-digit growth seen before the recession.
But the cumulative effect is dramatic.
Over the past decade, the cost for health coverage increased 97 percent, according to survey results for new national employer health benefits that nonprofit research groups Kaiser Family Foundation and the Health Research & Educational Trust released Tuesday.
During that same time period, wages rose only 33 percent.
“That’s why what looks like recent moderation to experts doesn’t always feel that way to working people,” said Drew Altman, Kaiser Family Foundation president and chief executive officer.
The average total annual premium for family health coverage reached $15,745 this year, up 4 percent from the previous year.
The average worker is paying $4,316 this year toward the total cost of family health coverage — a $187 increase from the previous year and $2,179 more than a decade ago.
Workers who earn the least are being hit doubly hard in their wallets.
The annual survey found that people who worked at lower-paying companies — where 35 percent or more of workers earn $24,000 or less annually — pay an average of $4,977 toward the annual premium for family health coverage.
Employees at higher-paying companies — at least 35 percent of workers earn $55,000 or more a year — pay nearly $1,000 less toward their family’s health insurance ($3,968).
Lower-wage workers also are footing more of the bill when they seek medical care.
About 44 percent of low-wage workers have deductibles of $1,000 or more before many services are covered, compared with 29 percent of employees at higher- wage firms.
Experts said the effects of federal health-care reform on the cost of coverage won’t be seen in the immediate future because the biggest changes aren’t coming until 2014.
Nationwide, premiums for health coverage are expected to increase about 6.5 percent next year after changes are made to benefits, according to another report issued Tuesday by Mercer, a national consulting firm.
A majority of employers (58 percent) plan to shift costs to their workers to keep the increase down, Mercer found.
In Northeast Ohio, initial increases to renew annual health coverage are trending 10 to 12 percent, which is being reduced to between 6 and 8 percent through negotiations and benefit changes, said J.T. Shilling, a principal for Mercer who covers Western Pennsylvania and Northeast Ohio.
The region tends to have higher premiums than some parts of the country because it has an older work force and historically richer benefits, he said.
Employers are responding by embracing wellness programs to cut costs, as well as high-deductible plans paired with health savings accounts or health reimbursement accounts that can be used to pay for care or saved for future needs, Shilling said.
“The pie keeps growing,” he said, referring to overall health-care costs. “If you’re making people healthier, if you’re making them spend more wisely, the pie starts to shrink, or not grow as fast.”
Clinical Research Management Inc., a firm based in Hinckley with 350 employees who manage clinical trials, is among the many companies trying to balance the need to control costs with the desire to offer attractive benefits.
The company has been hit with health-premium increases ranging from 7 to 10 percent in recent years, said Human Resources Director Chris Macko, who participated in the Kaiser survey.
To control costs, he said, the firm switched to a fully insured model, in which the company pays the medical bills for its employees rather than paying an insurance company to cover the costs.
The move offers “a little more control, a little more ability to contain costs,” he said.
Clinical Research Management also is exploring wellness initiatives that can be used to keep employees healthier and ultimately reduce costs, Macko said.
Employers increasingly are adopting incentive programs that reward workers who quit smoking, control their cholesterol or take other steps to improve their health, said Paula Sauer, senior vice president of pharmacy and care management for Medical Mutual of Ohio.
“Based on your blood pressure results, your smoking, your weight, your cholesterol, people are offering incentives,” such as reductions off the employee share of the insurance premium, she said.
Cheryl Powell can be reached at 330-996-3902 or firstname.lastname@example.org. Follow Powell on Twitter at twitter.com/abjcherylpowell.