State Trends in Premiums and Deductibles, 2003–2011: Eroding Protection and Rising Costs Underscore Need for Action

Rapidly rising health insurance premiums and higher cost-sharing continue to strain the budgets of U.S. working families and employers. Analysis of state trends in private employer-based health insurance from 2003 to 2011 reveals that premiums for family coverage increased 62 percent across states—rising far faster than income for middle- and low-income families. At the same time, deductibles more than doubled in large and small firms. Workers are thus paying more but getting less-protective benefits. If trends continue at their historical rate, the average premium for family coverage will reach nearly $25,000 by 2020. The Affordable Care Act’s reforms should begin to moderate costs while improving coverage. But with private insurance costs projected to increase faster than incomes over the next decade, further efforts are needed. If annual premium growth slowed by one percentage point, by 2020 employers and families would save $2,029 annually for family coverage.