The cost for businesses to provide health coverage for workers rose the most this year since 2005, and could climb as high as $32,175 for a family by 2021. The average cost of a family policy rose 9% in 2011 to $15,083, according to a poll of 2,088 private companies and government agencies conducted by the Henry J. Kaiser Family Foundation and the American Hospital Association’s Health Research and Educational Trust.
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The rising cost of health insurance has many employers forgoing pay raises and passing on more medical costs to their employees. “Rising health-care costs have crowded out other elements of the compensation package,” said Randall Abbott, a senior healthcare consultant at Towers Watson & Co. (NYSE:TW) “That’s the price we are paying, beyond the fact that health-care cost in and of itself continues to be more expensive.”
The average price of a family plan has risen 113% since 2001, which has two-thirds of companies planning to ask workers to pay a bigger portion of their premiums next year, according to a Towers Watson report. This year, employees are paying 28% of premiums on family plans, relatively the same as in 2010, but the proportion of health insurance premiums paid by workers has risen 131% since 2001. Meanwhile, only 60% of employers said they offered medical benefits this year, down from 69% in 2010.
To ease costs, many companies are offering health plans with higher deductibles, which are accompanied by lower premiums, in order to shift more medical costs to employees. The average premium for one of these high-deductible plans was $13,704 for a family this year. Among those workers currently receiving health benefits, 17% are enrolled in a high-deductible health plan, up from 13% in 2010 and 8% in 2009.
Health Insurance Companies to Watch: Aetna Inc. (NYSE:AET), CIGNA Corporation (NYSE:CI), Humana Inc. (NYSE:HUM), WellPoint, Inc. (NYSE:WLP), UnitedHealth Group Inc. (NYSE:UNH), Health Net, Inc. (NYSE:HNT), Universal American Corp. (NYSE:UAM), HealthSpring, Inc (NYSE:HS), Molina Healthcare, Inc. (NYSE:MOH), Coventry Health Care, Inc. (NYSE:CVH), and WellCare Health Plans, Inc. (NYSE:WCG).