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Health costs rise 5% as coverage gets skimpier

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From the Associated Press

Health insurance premiums rose a modest 5% this year for coverage that’s getting skimpier, researchers say.

The 5% increase was comparable to last year’s uptick. Overall, premiums for family coverage increased to $12,680 and premiums for single coverage increased to $4,704, according to the Kaiser Family Foundation and the Health Research and Educational Trust. Employers pick up, on average, about three-quarters of that cost.

Over the last decade, insurance premiums have grown much more quickly than wages and inflation. That wasn’t the case this year. But to help slow the costs of health insurance, companies are increasingly offering coverage that requires their workers to pay more of their medical expenses before the insurance kicks in.

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In just one year, the percentage of workers enrolled in high-deductible insurance of $1,000 or more jumped from 12% to 18%.

“We may be seeing the tip of the iceberg of a trend toward less comprehensive, skimpier health insurance coverage for many working people,” said Drew Altman, president and chief executive of the Kaiser Family Foundation, which conducts health research.

The shift toward high-deductible insurance was most dramatic for workers in small businesses, where more than 1 in 3 covered workers must pay at least $1,000 out of pocket before their plan starts to pay a share of their healthcare bills. Generally, the more liability customers assume for their health expenses, the less insurers will charge them.

Often, high-deductible plans are coupled with health savings accounts. Consumers who enroll in such plans can set aside money on a pretax basis and then use the savings to help pay for some of their medical expenses. “The slowing rate of growth in health insurance premiums shows we are moving in the right direction, but much more needs to be done to make healthcare coverage more affordable for consumers and employers,” said Karen Ignagni, CEO of America’s Health Insurance Plans, the trade group for insurers.

Democratic lawmakers said the Kaiser report showed that out-of-pocket costs for insurance would continue to rise faster than wages without major legislative actions.

“Until we have universal coverage, these cost shifts away from insurers to consumers will continue,” said Rep. Pete Stark (D-Fremont), chairman of the health subcommittee within the House Ways and Means Committee.

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