Health beat: Premiums rise, but less than nationally

  • Article by: Warren Wolfe
  • Star Tribune
  • November 17, 2011 - 6:14 PM

It's probably no surprise to thousands of Minnesota families who are renewing employee health insurance this time of year, but a new study finds that their average premiums have shot up 38 percent in the past seven years, reaching $13,903.

Perhaps unexpected is that while premiums rose more than $3,800 over the past seven years, Minnesota's increase was the fourth-smallest among the states. Nationally, premium costs rose 50 percent.

In fact, the average family premium for employer-based coverage dropped Minnesota from seventh nationally to 20th, according to a report this week by the respected Commonwealth Fund, which studies health care practice and policy. Minnesota's average premium went from $817 higher than the national average in 2003 to just $32 higher in 2010.

Minnesota's rank for single- coverage premiums also fell, from 11th-highest to 22nd.

Still, rising insurance costs continue to strain family and employer budgets, the study said. If current trends continue, average premiums nationally could soar from $13,872 last year to $24,000 by 2020, it said.

That could change if the 2010 Affordable Care Act reduces costs by 1 to 1.5 percent a year, as some studies have suggested, the report said.

That could save Minnesota families $2,000 to $3,000 a year, it said.

Rising insurance costs closely mirror the underlying cost of health care, said Eileen Smith, spokeswoman for the Minnesota Council of Health Plans.

Minnesota employers rank high among the states in offering high-deductible insurance plans, she noted, which helps keep monthly premiums lower.

"There are lots of factors driving up costs, with new drugs, new procedures and the fact that we're aging," she said. "But there's also a lot of work to slow the growth, by the health plans, state and national governments and the providers. As the report says, we've got to make this all come together and work."

To read the Commonwealth Fund report, go to • 612-673-7253

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