January 8, 2015

New research sheds light on both good and bad news regarding health insurance premiums. The good: Premium increases are slowing down, potentially helped by the Patient Protection and Affordable Care Act. The bad: Workers aren’t necessarily getting any relief — in fact, employee premium costs and deductibles grew faster than income in every state over last decade.

According to the Commonwealth Fund, stagnant wages, rising health insurance costs and eroding benefits are the reasons workers and their families have yet to see the benefits of any changes or slowdowns in the health care market.

Average annual premiums — including both the employer and employee contributions — by 2013 represented 20 percent or more of household income in 37 states, compared to just two states in 2003. Workers in southern states, where median incomes are lower than elsewhere in the United States, face the highest cost burdens.

At the same time, in 31 states and the District of Columbia, people who obtain medical coverage through their employer saw premiums and deductibles grow more slowly between 2010 and 2013 than in the past. Premiums rose about 4.1 percent annually, down from a national average of about 5.1 percent from 2003 to 2010.

“Growth in employer premiums and deductibles slowed in many states after passage of the Affordable Care Act,” said report coauthor Sara Collins, vice president for health care coverage and access at The Commonwealth Fund. “However, slow wage growth means working families in every state are being squeezed by health care costs.”

For example, Commonwealth said that out-of-pocket costs — including workers’ premium contributions and deductibles — accounted, on average, for 9.6 percent of median household income in 2013, up from 5.3 percent in 2003.

Study authors said the combination of higher premium shares and higher deductibles “contribute to widespread public concerns about rising health care costs.”

The average premium for a family in 2013 was $16,000. But, of course, premiums varied from state to state.

In 2013, family premiums, including both the employer and employee contributions, ranged from a low of $13,477 to $14,382 in Alabama, Arkansas, Idaho, Mississippi and Hawaii to a high of $17,262 to $20,715 in the District of Columbia, New Jersey, Massachusetts, New York and Alaska. In seven states — Alaska, Arkansas, Kentucky, Nevada, New Mexico, Texas, and West Virginia — average premiums were 25 percent to 28 percent of the state median income in 2013.