Cathy Schoen Senior Vice President The Commonwealth Fund State Trends in Premiums and Deductibles, 2003–2009: How Building on the Affordable Care Act Will Help Stem the Tide of Rising Costs and Eroding Benefits Cathy Schoen Senior Vice President The Commonwealth Fund www.commonwealthfund.org cs@cmwf.org December 1, 2010

Figure 1. Premiums for Family Coverage, by State, 2009 Dollars U.S. average = $13,027 Data source: 2009 Medical Expenditure Panel Survey–Insurance Component.

Figure 2. Employer Premiums as Percentage of Median Household Income for Under-65 Population, 2003 and 2009 WA OR ID MT ND WY NV CA UT AZ NM KS NE MN MO WI TX IA IL IN AR LA AL SC TN NC KY FL VA OH MI WV PA NY AK MD ME VT NH MA RI CT DE DC HI CO GA MS OK NJ SD 16%–17.9% Less than 14% 14%–15.9% 18% or more 2003 2009 Data sources: 2003 and 2009 Medical Expenditure Panel Survey–Insurance Component (for total average premiums for employer-based health insurance plans, weighted by single and family household distribution); 2003–04 and 2009–2010 Current Population Surveys (for median household incomes for under-65 population).

Figure 3: Private Health Insurance Deductibles: State Averages by Firm Size and Household Type, 2003-2009 Single Person Plan Family Plan Data source: Medical Expenditure Panel Survey–Insurance Component, 2003 and 2009. Small is less than 50 employees.

Figure 4. Premiums for Family Coverage, 2003, 2009, 2015, and 2020 Health insurance premiums for family coverage Data sources: Medical Expenditure Panel Survey–Insurance Component (premiums for 2003 and 2009); Premium estimates for 2015 and 2020 using 2003-09 historic average national growth rate.

Figure 5. Projected Annual Savings in Family Premiums, 2015 and 2020 U.S. average premium at historic rate $17,906 $23,342 1% Slower Growth 1.5% Slower Growth U.S. average premium with savings $16,911 $21,019 $16,431 $19,938 U.S. average savings –$995 –$2,323 –$1,475 –$3,403 Average savings for lowest 10 premium states (AR, MT, OK, ND, SD, HI, KS, UT, OH, ID) –$888 –$2,072 –$1,316 –$3,036 Average savings for highest 10 premium states (MA, WI, VT, WY, DC, AK, CT, LA, MD, NH) –$1,086 –$2,536 –$1,610 –$3,716 Data sources: 2009 Medical Expenditure Panel Survey–Insurance Component; Premium estimates for 2015 and 2020 using 2003–09 historic average national growth rate.

Summary and Implications Past two decade trends spell higher premiums and worse coverage Premiums up and buying less protective benefits Squeeze on businesses and families across the country Health and Economic security at risk Uninsured and under-insured Affordable Care Act Potential for New Directions Benefit standards with financial protection Premium help for lower and middle class families Premium oversight and exchanges to curb excessive increases System reforms to slow cost growth and improve access, quality and safety