Chart Shows Tripling of Worker Expense for Group Health Insurance

Mother Jones printed an eye-opening chart showing the rise in employee-paid premiums for their group health insurance. Over the past ten years, the premium for individual group health insurance nearly tripled, from $334 to $899. The family rate went up almost as much, from $1619 to $3997.

It is rather troubling that the chart also notes that 30 percent of the plans reduced benefits or coverage. It is downright disturbing that when one factors in the rise in copays, and the fact that many workers are electing high deductible plans. Many workers may not even see any medical services being covered in a given year, even though they are still paying more than ever for coverage.

Frankly, I think the estimated cost of premiums is a understated by quite a large margin. In 2004, I was quoted a monthly premium for group health insurance under the COBRA law. Granted, COBRA shifts one hundred percent of the expense to the employee.

However, for an individual (as opposed to a family plan), non-smoker worker with no history of heart disease, cancer, etc., my quote was for $420 a month. I could not afford that much every month and so I declined it.

If the typical worker is paying about half the cost of insurance coverage, we can figure that at $200 a month, the total expense would amount to $1200 a year, not $899 as stated in the MJ chart.

Medical expenses have skyrocketed in the past decade. A Kaiser Foundation study reported that "Expenditures in the United States on health care surpassed $2.3 trillion in 2008, more than three times the $714 billion spent in 1990, and over eight times the $253 billion spent in 1980 (Kaiser Foundation, 2010)." These increases have far outpaced inflation as well as increases in worker pay.

A copay for an MRI or similar high-tech imaging can amount to $1000 or more. It is not hard to imagine an average worker easily running up a significant debt if he or she is unlucky enough to suffer a heart attack or stroke. The full effect of the Obama healthcare reforms will not go into effect until 2014; meanwhile, workers will have to tiptoe through the healthcare minefield.

SOURCES:
Kevin Drum, Mother Jones, Sept. 3, 2010, http://motherjones.com/kevin-drum/2010/09/raw-data-lost-decade-workers

U.S. Health Care Costs, KaiserEDU.org, March 2010, http://www.kaiseredu.org/topics_im.asp?imID=1&parentID=61&id=358