Trends & Indicators in the Changing Health Care Marketplace: Exhibit 3.3: Increases in Employer Health Plan Premiums Compared to Increases in Overall Inflation and Workers’ Earnings, 1988-2005

Trends and Indicators in the Changing Health Care Marketplace

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Exhibit 3.3: Increases in Employer Health Plan Premiums Compared to Increases in Overall Inflation and Workers’ Earnings, 1988-2005

In 2005, premiums for family coverage increased 9.2%. This is the first year of single digit increases since 2000. This is the second consecutive year that premium increases were less than they were in the previous year. While lower than in recent years, the 9.2% increase in the cost of coverage exceeds the overall rate of inflation by nearly 6 percentage points and the increase in workers’ earnings by over 6 percentage points. Since 2000, the cost of premiums for family coverage have increased by 73%.

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*Estimate is statistically different from the previous year shown at p<.05. No statistical tests were conducted for years prior to 1999.

†Estimate is statistically different from the previous year shown at p<.10.

Note: Data on premium increases reflect the cost of health insurance premiums for a family of four. Historical estimates of workers’ earnings have been updated to reflect new industry classifications (NAICS).

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 1999-2005; KPMG Survey of Employer-Sponsored Health Benefits: 1993, 1996; The Health Insurance Association of America (HIAA): 1988, 1989, 1990; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 1988-2005; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey (April to April), 1988-2005. From Exhibit 1.1, at http://www.kff.org/insurance/7315/sections/ehbs05-1-1.cfm.

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Trends and Indicators in the Changing Health Care Marketplace
Information provided by the Health Care Marketplace Project.
Publication Number: 7031
Information Updated: 04/26/06