Health insurance premiums increased by 8.2 percent in California in 2005, the first time in four years increases were held to single digits, according to results from the 2005 California Employer Health Benefits Survey released today by the California HealthCare Foundation (CHCF). However, the rise still outstripped the overall 3.9 percent statewide inflation rate.
Conducted by The Center for Studying Health System Change (HSC), the annual survey highlights statistics and trends specific to California and provides comparisons between the state and the nation. The survey is an offshoot of a national employer study conducted by the Kaiser Family Foundation and the Health Research and Educational Trust.
While the percentage of employers offering coverage has declined nationwide to 60 percent, a nine-point drop since 2000, the percentage of California employers providing health insurance (67 percent) remains relatively unchanged. As in previous surveys, firms cite the high cost of coverage as the primary reason they did not offer health benefits.
Looking to offset the cost of premiums, 38 percent of California's large employers (those with 200 or more workers) report they are very likely to increase the amount employees pay for health insurance in 2006. Thirty-two percent say they are somewhat likely to ask employees to pay more for coverage.
On average, California workers paid $41 per month for single coverage in 2005 and $240 for family coverage. Workers in lower-wage firms, by contrast, paid an average of $54 per month for single coverage and $302 for family coverage.
According to the survey, HMOs remain the least costly type of health plan in the state — on average more than one-third less expensive than PPO plans for single coverage. But while HMOs in California cost less than the national average, PPOs are more expensive.
"The decline in the pace of health care premium increases in California is encouraging," said Jill Yegian, Ph.D., director of the health insurance program at CHCF. "But premiums still increased twice as fast as inflation, offsetting the effect of wage increases and leaving too many Californians unable to afford coverage."
"The results show that lower-wage workers are faring the worst in the employer-based health insurance system," said Jon Gabel, vice president of The Center for Studying Health System Change. "Their employers are far less likely to offer health benefits, and when they do, workers have to pay more for coverage."
Other survey findings include:
- The average monthly premium across all plans in California is $321 for single coverage ($3,852 per year) and $858 for family coverage ($10,296 per year).
- Copayments for office visits increased in HMO plans in 2005. The percentage of California workers with a $20 copayment increased from 14 percent in 2004 to 22 percent in 2005.
- Only 35 percent of the state's lower-wage firms offer health benefits compared to 72 percent of higher-wage firms.
- Twenty percent of California employers offered a high-deductible health plan in 2005.
The California Employer Health Benefits Survey 2005 is available through the link below. Also available from CHCF is Snapshot: Individual Health Insurance Market 2005, produced by RAND.
Results of the national survey, released in September 2005, are available at www.kff.org.
About The Center for Studying Health System Change
The Center for Studying Health System Change (HSC) is a nonpartisan policy research organization located in Washington, D.C. HSC designs and conducts studies focused on the U.S. health care system to inform the thinking and decisions of policymakers in government and private industry. Visit www.hschange.org for more information.
Methodology and Sponsorship
The California Employer Health Benefits Survey is a joint product of the California HealthCare Foundation and The Center for Studying Health System Change (HSC). The survey was designed and analyzed by researchers at HSC, and administered by the National Research LLC (NR).
This California survey is based on a national employer survey conducted annually by the Kaiser Family Foundation and the Health Research and Educational Trust. National results in this study are based on the U.S. survey, which is available at www.kff.org.
The findings are based on a random sample of 846 interviews with employee benefit managers in private firms in California. NR conducted interviews from April to July 2005. As with prior years, the sample of firms was drawn from the Dun and Bradstreet list of private employers with three or more workers. The margin of error for responses among all employers is +/- 3.4 percent; for responses among employers with 3-199 workers is +/- 4.7 percent; and among employers with 200+ workers is +/- 4.9 percent. Some exhibits do not sum to 100 percent due to rounding effects.