Health coverage costs a bit lower

 

Cost increases for health insurance premiums are lower nationally this year, and although California’s are higher than some other states, they are also still lower than in previous years.

The Kaiser Family Foundation and Health Research and Educational Trust confirm what news wires also are reporting: nationally, the rise in cost of health care premiums is about 5 percent. This continues a trend from 2007, when a similar small cost increase was instituted.

However, according to Randy Jones of Hometown Insurance Services in Solvang, in California premiums are somewhat higher: “Ours in California, the rate went up higher than that. We’re getting a 10 percent rise,” he said.

 

Although the national increases were reported at the end of September, California’s current rates are more difficult to come by. Insurance industry and regulatory agency figures found on the Internet indicate the 10 percent rise is in the ballpark.

“If increases aren’t as bad this year, they were pretty horrendous last year,” Jones continued. One reason California’s premiums are not shooting up, he said: “We’re healthier.”

Another reason that California’s health insurance premiums have stayed relatively low, according to Jones, is the result of a ballot measure from about 15 years ago. That measure was approved by voters, capping punitive damage amounts.  “So insurance companies don’t have to approve every little thing for fear of being sued,” Jones said. “But the quality of health care hasn’t changed.”

The Kaiser study showed that not only insurance premiums have shown a steady increase. “Cost sharing for medical services has also increased in recent years. The percentage of employers sponsoring insurance and the percentage of workers covered by employer-sponsored insurance remained stable over the past year.”

 

In 2008, premiums for family coverage averaged $12,680 and premiums for single coverage average $4,704. Of these amounts, employers pay about three-quarters of that cost, and the insured employees pay the remainder.

Employer-sponsored insurance is the leading source of health insurance, covering about 158 million non-elderly people in America, according to the Kaiser study.

An option for employees with high-deductible plans is to enroll in a health savings accounts. Consumers who enroll in such plans can set aside money on a pretax basis and use the funds to help pay for some of their medical expenses, something the Kaiser foundation says is happening with slightly more frequency as out-of-pocket expenses rise.

Drew Altman, president and CEO of Kaiser Family Foundation, in an entry on the foundation’s website dated Sept. 30, addressed the quandary of providing health care for employees, including those with lower incomes.

 

“For as long as I have been in the health care field, there has been debate between experts about how much health insurance people should have. Some — typically conservatives — argue that we are over-insured, and that if people saw more of the costs of health care themselves they would consume it more prudently, use less health care overall, and we would spend less on health care  as a nation. They also believe that making more bare bones options available in the market will enable more people to afford coverage.

“The liberal view is generally that if people paid more of the cost of health care they would be even more exposed than they are today to financial hardship, access would suffer, and low-income people and the chronically ill in particular would be hit the hardest. They also believe that offering less comprehensive insurance options will split the risk pool further, driving up costs for those who remain in more traditional comprehensive plans. They advocate providing more comprehensive health insurance along with generous subsidies so that it is affordable for low-income individuals and families.

 

“These differences on what the nature of health insurance should be are reflected in the [presidential] candidates’ positions. Senator Obama favors comprehensive coverage similar to the coverage Federal employees and members of Congress get. Senator McCain is proposing fixed dollar tax credits, in part, he has said, as a way to encourage people to buy high-deductible plans with savings accounts.”

The material in this story regarding the current levels of health insurance costs was derived from research published by the Kaiser Family Foundation. It is a non-profit private organization based in Menlo Park, CA, dedicated to producing and communicating results from its research and analysis on health issues. Some additional material came from the Health Research & Educational Trust, a private, non-profit organization involved in research, education, and demonstration programs addressing health management and policy issues.