Premium trend hits 119%


If we stay on this course, premiums will increase another 94% by 2020

NATIONAL REPORTS – Family premiums for employer-sponsored health insurance increased 119% between 1999 and 2008, and could increase another 94% to an average $23,842 per family by 2020 if the current trend continues, according to the Commonwealth Fund.

Its recent report shows that national reforms to slow healthcare cost increases by 1% to 1.5% per year would yield substantial savings for families and businesses across the country. By 2020, slowing the annual rate of growth by 1% would yield more than $2,500 in reduced premiums for family coverage, and slowing growth by 1.5% would yield more than $3,700 in premium savings compared with projected trends.

Cyndy Nayer, CEO, the Center for Health Value Innovation, says the cost increases are often due to poor outcomes and use of services needed to fix the problems that result when early detection and compliance to treatment are ignored.

In the case of asthma, for example, that means more emergency room visits, more rescue treatments and more missed days of work, which affects the total costs to the system.

"And the cost shifting to employees that many companies have used has neither held down costs nor created a healthier level of consumerism," she says.

Building plans and incentives that encourage people to manage their health better-a value-based design-has been shown to decrease health cost trends up to 40%, and, in some cases, even more, according to Nayer.

"We have evidence, and it keeps coming in, that value-based designs-focusing on access and affordability-deliver on the promise of improved health status and bending the financial trend."

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