With Health Insurance Costs on the Rise, Pittsburgh Still Lower than Some
Between 2003 and 2011 Pittsburghers with a family health insurance policy saw their annual premiums on average increase 51 percent, from $9,193 to $13,850, according to a new report from The Commonwealth Fund, a foundation that seeks to improve health care.
Nationwide the average family premium increased more than $5,000.
Sara Collins, Vice-President for Affordable Health Insurance at the Fund, said they looked at trends in employer based health plans. She said it’s not just premiums that are mounting but deductibles.
“People are paying more out of pocket for their health care cost even though they’re paying more in premiums,” said Collins. “So in Pennsylvania the average premium for a single policy is right under $900, and that’s an increase from 2003 of 134 percent.”
Collins said one reason premium costs are increasing is because health care costs are climbing faster than inflation and personal income. She said it also could be due to insurance companies’ administrative costs.
Pennsylvanians’ premiums are now about 20 percent of their incomes.
Collins said that cost is shared with employers, but employees are now paying for roughly 25 percent of their premium, about $3,500 yearly.
She said there is good news for Pittsburgh though: health care premiums are lower here than the national average, the state average, and Philadelphia.
“Cost of living (is) different in Pittsburgh compared to the rest of the state and also the U.S. average,” said Collins. “And also may reflect local trends in health care spending so that the providers may provide services at somewhat lower cost in the Pittsburgh area than they do in other parts of he state and the nation.”
Collins said they hope to see a reduction in premium growth in the next several years due to the Patient Protection and Affordable Care Act.
She said the act puts caps on the amount health insurance companies can spend on administrative costs, gives tax breaks for those forced to pay for their own insurance, and mandates companies to treat everybody as at the same risk level.
Collins said states that want to take on reform should look to Massachusetts as a model that “represents great promise.”
Recently Massachusetts adopted a law stating that health care costs must stop growing faster than other household and business expenses. It also created a Health Policy Commission, which will set the state benchmark for health care spending and creating recommendations about how to control costs.