Senate Joint Resolution 4 (2006) directed the Joint Commission on Health Care (JCHC) to “study the derivative effects of increases in health care costs on health insurance premiums."

Employer-sponsored health insurance is the primary source of health insurance for the non-elderly in the United States. More than 150 million Americans currently receive their health insurance through employers. However, the percentage of employers, particularly small employers, offering health insurance is decreasing. In addition, while the increasing cost of premiums for employer-sponsored health insurance has slowed in recent years, the 2006 increase of 7.7 percent exceeded the increase in overall inflation (3.5 percent) and in worker earnings (3.8 percent). (Source: Kaiser Family Foundation/Health Research and Educational Trust 2006 Employer Health Benefits Survey.)

In response to rising health insurance costs, some employers have increased employee cost-sharing requirements, reduced retiree health benefits, or discontinued providing health insurance as a benefit. As employers reduce or eliminate health insurance benefits, some employees move to the more expensive individual health insurance market, while others access government programs or become uninsured. Employers, health insurers, and health care providers have undertaken a number of cost containment and quality improvement efforts in an attempt to reduce the cost of health insurance. However, these cost containment efforts are expected to be marginally effective in containing rising health insurance costs.

This report includes a preface, executive summary, and presentation of study findings. The Joint Commission on Health Care approved the staff recommendation to continue addressing the issue of health insurance costs as part of a 2007 JCHC study based on HB 1324 (to expand health insurance into rural areas of the Commonwealth). This continuance will allow for consideration of data and findings from other ongoing studies and reports in making recommendations prior to the 2008 General Assembly Session.