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NATIONAL COALITION ON HEALTH CARE

CONTINUING INCREASES IN HEALTH INSURANCE COSTS IN GEORGIA POSE THREAT TO WORKERS’ COVERAGE

Health insurance premiums for private businesses in Georgia have increased significantly over the last three years. The annual increase has been nearly 9 percent annually during this period. The trend is projected to continue, with premiums expected to increase an average of 8.5 percent annually between 2002 and 2005. Such increases would be 2 1/2 to 3 times the general rate of inflation in the economy.

The impact of these continuing increases on workers could be substantial. Many businesses will pass on a greater share of the premiums to workers, will reduce the benefits provided, or may even drop their employer-sponsored health insurance.

Cost Increases

In 2000, the average health insurance premium paid by Georgia employers was $2,481 for a worker and $6,084 for a family. Employees contribute a greater percent of the overall cost of health insurance for family coverage than for employee-only coverage in Georgia (25 percent for a single employee versus 37 percent for family coverage).

Based on projected premium increases, Georgia employers, on average, will have to pay $3,540 a year for health insurance coverage for a single employee and $8,567 for family coverage in 2005. In turn, single employees will have to contribute $885 a year ($74 a month) toward their health insurance to maintain their individual coverage and workers will have to contribute $3,170 a year ($264 a month) toward their health insurance to maintain their family coverage in 2005.

The cost of health insurance differs according to firm size. For example, Georgia firms that employ between 25-99 employees (nearly 400,000 workers are employed in these size firms in Georgia) will pay $9,600 in health insurance costs for family coverage in 2005 and workers in those firms will pay $4320 of that premium. For single workers, employers will pay $3800 toward health insurance coverage with those workers contributing $1200 toward that coverage.

The portion of the premium that workers pay is in addition to their out-of-pocket health expenses associated with deductibles and co-insurance. Nationally, average annual deductibles range from $187 under a preferred provider plan to $545 under a conventional plan. Co-payments for doctor’s visits average $10-15 per visit under HMO plans, but are 20 percent of the cost of medical care (hospital and physician costs) under conventional plans.

Health Insurance Coverage in Georgia

Nearly one million workers and their dependents (940,000) in the state of Georgia have no health insurance coverage through their own employer. Either these workers get coverage through their spouses’ employer, purchase an individual health insurance plan which is significantly more expensive than employer-sponsored coverage, or they go without coverage.

Based on expected health insurance premium growth, an additional 200,000 Georgians could lose their health insurance over the next four years. By 2005, this could result in nearly 1.6 million residents of the state of Georgia being without health insurance coverage.

Only slightly more than half (51.8 percent) of the 171,000 private employers in the state of Georgia currently offer health insurance coverage. Only a third of all firms with fewer than 10 workers offer health insurance coverage, and 44 percent of firms with 10 to 24 workers offer coverage. High and rising health insurance premiums could place health insurance out of reach for firms that are currently offering coverage and prevent other firms from offering health insurance. Many firms offering coverage may require workers to pay higher premiums in order to continue to provide health insurance coverage to their work force. But in the process, they could price health insurance out of reach for many low-income workers.

Fewer than half of all workers (48.5 percent) in the smallest firms in Georgia (under 10 employees), receive health insurance coverage through an employer. And typically these firms are the fastest growing companies in today’s economy.

1200 G Street, N.W., Suite 750, Washington, D.C. 20005 – Phone: (202) 638-7151

Fax:(202) 638-7166

NATIONAL COALITION ON HEALTH CARE
  March 1, 2001
Contact: Pat Schoeni: 202/638-7151

CONTINUING INCREASES IN HEALTH INSURANCE COSTS IN GEORGIA POSE THREAT TO WORKERS’ COVERAGE

Health insurance premiums for private businesses in Georgia have increased significantly over the last three years. The annual increase has been nearly 9 percent annually during this period. The trend is projected to continue, with premiums expected to increase an average of 8.5 percent annually between 2002 and 2005. Such increases would be 2 1/2 to 3 times the general rate of inflation in the economy.

The impact of these continuing increases on workers could be substantial. Many businesses will pass on a greater share of the premiums to workers, will reduce the benefits provided, or may even drop their employer-sponsored health insurance.

Cost Increases

In 2000, the average health insurance premium paid by Georgia employers was $2,481 for a worker and $6,084 for a family. Employees contribute a greater percent of the overall cost of health insurance for family coverage than for employee-only coverage in Georgia (25 percent for a single employee versus 37 percent for family coverage).

Based on projected premium increases, Georgia employers, on average, will have to pay $3,540 a year for health insurance coverage for a single employee and $8,567 for family coverage in 2005. In turn, single employees will have to contribute $885 a year ($74 a month) toward their health insurance to maintain their individual coverage and workers will have to contribute $3,170 a year ($264 a month) toward their health insurance to maintain their family coverage in 2005.

The cost of health insurance differs according to firm size. For example, Georgia firms that employ between 25-99 employees (nearly 400,000 workers are employed in these size firms in Georgia) will pay $9,600 in health insurance costs for family coverage in 2005 and workers in those firms will pay $4320 of that premium. For single workers, employers will pay $3800 toward health insurance coverage with those workers contributing $1200 toward that coverage.

The portion of the premium that workers pay is in addition to their out-of-pocket health expenses associated with deductibles and co-insurance. Nationally, average annual deductibles range from $187 under a preferred provider plan to $545 under a conventional plan. Co-payments for doctor’s visits average $10-15 per visit under HMO plans, but are 20 percent of the cost of medical care (hospital and physician costs) under conventional plans.

Health Insurance Coverage in Georgia

Nearly one million workers and their dependents (940,000) in the state of Georgia have no health insurance coverage through their own employer. Either these workers get coverage through their spouses’ employer, purchase an individual health insurance plan which is significantly more expensive than employer-sponsored coverage, or they go without coverage.

Based on expected health insurance premium growth, an additional 200,000 Georgians could lose their health insurance over the next four years. By 2005, this could result in nearly 1.6 million residents of the state of Georgia being without health insurance coverage.

Only slightly more than half (51.8 percent) of the 171,000 private employers in the state of Georgia currently offer health insurance coverage. Only a third of all firms with fewer than 10 workers offer health insurance coverage, and 44 percent of firms with 10 to 24 workers offer coverage. High and rising health insurance premiums could place health insurance out of reach for firms that are currently offering coverage and prevent other firms from offering health insurance. Many firms offering coverage may require workers to pay higher premiums in order to continue to provide health insurance coverage to their work force. But in the process, they could price health insurance out of reach for many low-income workers.

Fewer than half of all workers (48.5 percent) in the smallest firms in Georgia (under 10 employees), receive health insurance coverage through an employer. And typically these firms are the fastest growing companies in today’s economy.

1200 G Street, N.W., Suite 750, Washington, D.C. 20005 – Phone: (202) 638-7151

Fax:(202) 638-7166