Insurance rates will rise 94 percent by 2020 if cost-saving reforms to the US health care system aren’t enacted, a new study from the Commonwealth Institute finds.

BY DANIEL TENCER

The 90-year-old non-profit health care charity released an analysis of health care costs and forecasts that says employer-sponsored family plans will rise from an average cost of $12,298 in 2008 to $23,842 in 2020.

By contrast, the same coverage would have cost around $9,200 in 2003.

“Across the United States, middle-income individuals and families have been los¬ing ground as the cost of health insurance continues to rise at a faster rate than incomes,” the report states. “Rising employer insurance premiums have forced many working fami¬lies to trade off increases in their wages just to hold onto their health benefits. The expanding share of health insurance premiums paid by workers themselves has also taken a greater cut out of paychecks.”

The Commonwealth Fund’s report continues:

1. Between 1999 and 2008, employer-sponsored fam¬ily health insurance premiums rose by 119 percent nationally, while median family income rose by 29 percent.

2. Such a rapid increase in the cost of employer-sponsored health benefits has forced difficult choices at workplaces across the country.

3. Studies indicate that slower growth in wages and lower savings for retirement (worker and employer contributions) have been part of the trade-off to preserve health benefits. Despite such trade-offs, the monthly cost of premiums paid by workers and their families is up—consuming an ever-greater share of any wage increases they might receive.

At the state level, premiums have risen rapidly, and far faster than average incomes. In the five years from 2003 to 2008, total premiums for family coverage under employer-sponsored plans rose a cumulative average of 33 percent. The five-year increase in family premiums ranged from about 25 percent in the three lowest-growth states (Michigan, Texas, and Ohio) to 45 percent in the two highest-growth states (Indiana and North Carolina). Twelve states saw increases of 40 percent or more and 36 states saw increases of 30 percent or more—well above the rate of income growth.

The analysis could prove a much-needed talking point for supporters of health care reform.

“The public option isn’t just some kind of political litmus test,” writes Daily Kos. “It’s the last stand for affordable health care in the future. The public option means that American families will not have to pay a quarter of their monthly income on health insurance in ten years. It’s bad enough that we’re now paying 18 percent [of GDP].”

The Commonwealth Report’s numbers “are yet another reminder that genuine healthcare reform, in particular Medicare for all, is the most effective way to rein in costs,” the California Nurses’ Association said in a statement drawing attention to the study.