By N.C. Aizenman, Published: November 16, 2011

Premiums for employer-sponsored health insurance have risen faster than incomes in every state in the nation, according to a report released Thursday.

The analysis of federal data by the Commonwealth Fund, an independent research organization, shed new light on the state-by-state picture while essentially confirming a national trend, highlighted in other recent surveys of employer-sponsored insurance, of greater premiums for skimpier benefits.

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The District of Columbia had the highest annual total premiums, including both the employer’s and the worker’s share. In 2010, they averaged $5,644 for a single policy and $15,206 for a family version — a rise of 51 percent and 41 percent, respectively, since 2003.

But the costs were significant even in states with some of the lowest average rates, such as Alabama, where a single policy averaged $4,571 in total premiums and a family version reached $12,409. Maryland and Virginia were roughly in the middle of the pack.

“Although employees typically don’t see the total cost of their insurance, the sharp increase, in effect, means lower wages and salaries as employers make the trade-off between increasing wages and offering insurance,” said Cathy Schoen, a co-author of the study.

There was also little correlation between a state’s average premiums and its cost of living. States such as New Mexico and West Virginia, where incomes are lower than average, had some of the highest premiums in the nation.

Schoen said the variation was caused by a range of factors, including how generous employers’ plans were in any given state.

“Premiums are lower if deductibles tend to be higher,” she noted. So in states such as Montana, where the average family deductible was $2,295, lower total premiums mask high out-of-pocket costs. By contrast, the District had among the lowest average deductibles.

Increasing deductibles is only one way employers are attempting to shift health costs onto their workers. Another is asking employees to shoulder a larger share of the premium.

Workers in Virginia were among those who made the highest contributions — paying $1,114 for an individual plan and $4,477 for a family plan. That was a 76 percent increase since 2003 for individuals, and 64 percent for families.

Across all states, total premiums now amount to a sizable proportion of typical incomes. In 2003, 13 states had annual premiums that comprised less than 14 percent of the median income. In 2010, there were none. And 62 percent of Americans now live in a state in which health insurance premiums equal 20 percent or more of median earnings for adults younger than 65.

Schoen cited an earlier Commonwealth Fund study predicting that the nation’s new health-care law could help curb future premium increases through measures that encourage providers to give less expensive care, subject insurers to greater scrutiny and foster more competition.

That report found that the net effect would be to slow annual premium increases by 1 percent — a more optimistic assessment than those of the Congressional Budget Office and other government sources. Thursday’s report considered the effect of a decrease of 1 percent per year and found that it could amount to substantial savings over the long haul: $2,161 in annual premium cost savings for families by 2020, for instance.

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