New York Working Families Hit With 50 Pct. Increase in Health Coverage Costs Since 2001; Employers Support Public Programs to Help Make Coverage Affordable

5/10/2004

From: Mary Mahon, 212-606-3853 or 917-225-2314 (cell), mm@cmwf.org or Bill Byrne, 212-606-3826, bkb@cmwf.org both of The Commonwealth Fund

NEW YORK, May 10 -- New Yorkers' annual health insurance premiums jumped an average of $1,670 for family coverage between 2001 and 2003, and employers are asking workers to pay a larger share of the bill, according to a new report from The Commonwealth Fund.

The premium paid by employees for family coverage increased 50 percent between 2001 and 2003. In 2003, families paid 23 percent of the premium, an average of $2,100 a year, compared to 17 percent of the premium, or $1,400 a year in 2001. The annual average premium for family coverage in New York State is $9,612.

The trend of higher health care costs for New York employees is likely to continue: two of five (42 percent) employers in New York said they were likely to increase the amount workers pay in the next year, raising concerns about increasing numbers of uninsured, particularly among low-wage workers who might not be able to afford higher premiums.

Employer-Sponsored Health Insurance in New York, by Jennifer Edwards and Sabrina How at The Commonwealth Fund and Heidi Whitmore, Jon Gabel, and colleagues at the Health Research and Educational Trust (HRET), is based on interviews with employee benefit and human resource managers of employers in New York State.

"Employers in New York believe that health benefits are an important way to attract and keep a high-quality, healthy workforce but are feeling the pressures of rising costs," said Karen Davis, president of The Commonwealth Fund. "Among businesses in New York there is strong support for finding new ways to keep coverage available and affordable."

Many employers are unfamiliar with, but express interest in programs that could help employees afford coverage, such as Healthy New York, which makes low-cost private insurance available to small firms with low-wage workers, and Health Pass, a purchasing cooperative for small employers. A majority (62 percent) of employers with a predominantly low-wage workforce said they would be somewhat or very interested in subsidizing their employees' participation in two other programs, Family Health Plus or Child Health Plus.

Employees are also facing higher deductibles for health care services than they have in the past, and face longer waiting periods before their health benefits take effect. Two of five (39 percent) New York employers require waiting periods of three months or more before employers become eligible for benefits, compared with one-fourth (27 percent) in 2001. In 2003, just one- fifth (19 percent) of workers worked for firms that provided coverage immediately, compared with one-third (33 percent) in 2001.

The proportion of firms that offer their employees health insurance remains unchanged since 2001. Among the firms not offering coverage at all, 85 percent say they do not because of the high costs.