The Kaiser Family Foundation Yearly Survey of Employer Health Benefits is Out Today
The average annual premium for single coverage in 2009 is $4,824 and the average annual premium for family coverage is $13,375. The average family premium in 2009 is about 5% higher than in 2008. The average premium for single coverage is not significantly different from last year ($4,704).
The real qustion is: why are the employers paying such outrageous prices.
Take a look at those numbers and ask yourself this quesion: What is going to happen if the federal govenment requires employers to pay 75% of the cost of this type of insurance for all their full-time and part-time workers?
Answer: There are going to be a lot fewer workers.
Eventually, there will only be health care. No wages. No pensions. Only health care. Of course if the only compensation for working is health care, that means no payroll taxes, no income taxes, etc. 🙂
Why doesn’t it occur to these employers that they could save a lot of money by choosing high deductibles and putting the premium savings in Health Savings Accounts.
Ken, I assume that’s a rhetorical question. For one thing most coverage, and all employer-based coverage, is community rated. The average figures include a mix of high-risk and low-risk workers of various ages. In that light I don’t know that it’s all that outrageous.
Stephen C.: I think employers are already choosing higher deductibles, at least where not constrained by union contracts.
I know mine was.
Sen. Ron Wyden is reportedly concerned about Baucus’ (Senate Finance) proposal that would cap premiums for middle-income Americans at 13% of income. Supposedly, that’s expecting middle-income families to pay way more than they can afford. Yet Americans already pay far more than that for their employer plans. People who pay $13,375 for employer coverage would have to earn $102,884 before they were only spending 13% of income on health coverage. Any family earning less than $102,884 is spending a higher proportion of income on health coverage. For example, say, a couple earning $65,000 has an employer plan costing $13,375. Their contribution is 25%, on average ($3,344). Indirectly, they pay $10,031 in reduced wages. So their actual percent of wages spent on insurance is 17.8% ($13,375/($65,000 + $10,031)). Yet, in this example the employer is doing exactly what liberals want employers to do: provide working families with expensive health benefits – that workers (theoretically) cannot afford.