Employer-sponsored health insurance premiums have increased an average of 11% since 2003, to $3,695 per year for individual coverage and $9,950 per year for family coverage.[@@]

The Henry J. Kaiser Family Foundation, Menlo Park, Calif., and the Health Research and Educational Trust, Washington, have published those figures in a report based in a survey of 3,017 public and private employers with 3 or more employees. Researchers conducted the survey between January and May.

The typical worker has family preferred provider organization coverage. The average cost of family PPO coverage has increased 9.7% in the past year, to $10,217 per year.

The overall rate of increase has slowed from the 14% increase reported in 2003, and the researchers note that employers were somewhat less aggressive about shifting costs onto employees’ shoulders.

About 61% of employees have health coverage this year, down only slightly from the coverage level of 62% reported in 2003.

But the Kaiser survey has found health premiums increasing an average of 10% or more for 4 consecutive years, and Drew Altman, president of the Kaiser Family Foundation, concludes in a statement about the findings that something has to give.

“The cost of family health insurance is rapidly approaching the gross earnings of a full-time minimum wage worker,” Altman says.

Since President Bush took office in 2001, premiums for family coverage have increased 59%. That compares with overall inflation of 9.7% and wage growth of 12%.

The Kaiser survey reveals another major shift in the group health market: 10% of the employers surveyed now offer high-deductible health plans, and 3.5% offer some kind of personal health account along with a high-deductible plan. Another 27% of the employers are “very likely” or “somewhat likely” to offer a high-deductible plan option within the next 2 years.

Meanwhile, only 5% of the employers surveyed still offer traditional indemnity insurance plans.

U.S. Senator Olympia Snowe, R-Maine, responded to the survey results by calling on the Senate to pass her association health plan bill, S. 545, which has received strong support from President Bush.

The bill would let multistate associations set up self-funded health plans for small businesses that happen to be members.

Small business groups argue that an AHP program would help small businesses enjoy the same freedom from state benefits mandates that large employers that can afford to start their own self-funded health plans now enjoy.

Opponents, including America’s Health Insurance Plans, Washington, and the National Association of Health Underwriters, Arlington, Va., contend that an AHP program would hurt private health insurers by forcing them to compete with lightly capitalized, lightly regulated organizations that would lure away the small groups with the healthiest employees.

Sen. John Kerry, D-Mass, the Democratic presidential nominee, opposes the AHP proposal, but he responded to the Kaiser survey results by promoting a proposal that shares some similarities with the AHP proposal.

Kerry’s proposal also would let small employers team up and avoid state benefits mandates, but his proposal would get around concerns about small, lightly regulated AHPs by turning the congressional health plan into the base for a kind of giant, national AHP.

Kerry also would set up a reinsurance program to protect private health plans from some of the cost of caring for members with unusually high claims expenses.