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Employer health premiums rose 170% in California in last decade

April 24, 2013|By Chad Terhune
  • Fewer California firms offered health benefits last year, a new survey shows, as premiums keep rising.
Fewer California firms offered health benefits last year, a new survey… (Francine Orr / Los Angeles…)

Premiums for employer health insurance in California jumped 170% over the last decade, more than five times the 32% increase in the state's inflation rate.

That escalation in premiums has taken a toll on employers' willingness to offer health benefits, according to an annual survey by the California HealthCare Foundation.

The report found that 60% of California firms offered health benefits last year, down from 73% three years ago. 

As costs keep climbing, many businesses are asking workers to contribute more toward their health insurance or accept fewer benefits. More than a third of the firms surveyed said they are likely to increase workers' share of premiums in the next year, and 24% plan to raise employees' deductibles.

Twenty-six percent of workers at small firms had an annual deductible of $1,000 or more for single coverage in 2012, according to the survey by the Oakland nonprofit group. That was up from 7% of workers in 2006.

One silver lining for California employers was that their health insurance premiums increased only 6.4% last year, down from 8.1% the previous two years.

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The percentage of California employers offering coverage is comparable to the national rate of 61%.

Earlier this month, a report from the Robert Wood Johnson Foundation showed a similar decline in employer-sponsored health coverage in California and the nation overall.

People who don't receive health coverage through work will have new options under the federal healthcare law, starting in January.

There will be federal premium subsidies for some consumers buying private coverage in government-run exchanges, and in some states there will be an expansion of Medicaid, the joint state-federal program for the poor.

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