New from CPPP: Rising Health Insurance Premiums in Texas Reinforce Need for National Health Reform

This new Policy Page examines trends related to employer-sponsored health insurance and ways national health reform can shore up employer sponsored health insurance to establish stable and secure coverage Texans can count on. Drawing on the latest national survey data and hard-to-get premium reports from Texas insurers, this brief provides a stark picture of the conditions that make the need for insurance reform so urgent. Some eye-opening examples:

• Texas’ smallest businesses—those with fewer than 10 employees—pay $1,400 a year more on average for health insurance than the same-sized businesses across the U.S.
• Premiums in Texas doubled over the last decade and are projected to double again by 2020.
• If reform slows premium growth by just 1 percentage point, Texans could save $2,500 a year on family premiums by 2020.
• The Texas Department of Insurance (TDI) data on average and maximum per-person premiums being paid by small and large employers show that in 2006 some small businesses in Texas paid exceedingly high premiums—some well over $20,000 per person, per year (note: per-person premiums, not family coverage).
• Small businesses that are charged these maximum rates pay on average nearly six times more than average premiums, and well above the maximum rates paid by large employers.
• From 2006 to 2008 Texas private-sector employees’ average out-of-pocket share of premiums for jumped from one-quarter to one-third of the cost of family coverage: from $3,024 per year (or 25.9 percent of total premium costs) to $3,874 a year (32.4 percent of total premium costs).
• Compared to the U.S., Texas private sector employees pay a larger share of employer-sponsored health insurance premiums (32.4 percent in Texas compared to 27.6 percent in the U.S.) and saw a larger increase in their contribution to premiums from 2006-2008 (a 28-percent increase in Texas compared to a 17-percent increase in the U.S.).

See the full report at http://www.cppp.org/research.php?aid=929