Labor & Employment Law

Health Insurers Raised Premiums at Staggering Pace in Past Decade

By Mike Hall

Here?s more evidence that the past decade has been very, very good for the health insurance industry and more insight into why Big Insurance fought so hard to derail health care reform, especially the new law?s requirement that companies actually spend premium dollars on health care.

Family health insurance premiums more than doubled between 1999 and 2009, far outpacing the growth in workers? earnings and overall inflation, reports the Economic Policy Institute (EPI). Those premium dollars fueled nearly annual levels of record profits along with outrageous CEO salaries and extravagant executive perks and bonuses.

While insurers raised their premiums by a staggering 131 percent, inflation for the decade was just 28 percent, while workers barely outpaced inflation with hourly earnings increasing just 38 percent. According to the EPI?s Economic Snapshot released today:

Since health insurance premiums are often shared between workers and their employers, this disproportionate rise in the cost of health insurance helps illustrate why it is increasingly difficult for both employers and their workers to afford.

Earlier this month, the journal Health Affairs reported that over the past decade, even in good economic times, the number of Americans with employer-sponsored insurance fell, and the number of uninsured Americans increased. Rising premium costs played, and will continue to play, a significant role in the declining number of covered workers, according to the report.

Last month, as part of the new health care reform law?the Patient Protection and Affordable Care Act?a new rue went into effect that requires insurers to spend up to 85 percent of premiums on medical services instead of profits and CEO pay.

In October, Big Insurance sent more than 1,000 executives and lobbyists to the National Association of Insurance Commissioners (NAIC) meeting in Orlando, Fla., to try and get the rule changed, according to the coalition Health Care for America Now (HCAN).

Full post as published by AFL-CIO NOW BLOG on December 15, 2010 (boomark / email).