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Increases Forecast for Employer-Based Health Premiums

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Another modest rise in employer-sponsored health insurance premiums this year likely will be followed by larger increases in coming years, says a new report from the Kaiser Family Foundation and the Health Research and Educational Trust.

For the third straight year, there was a 5 percent increase in the average annual premium for family coverage, which now stands at more than $13,000, the Associated Press reported. About 74 percent of the premium is paid by employers, while workers cover the rest of the cost.

The average annual premium for single coverage remained relatively flat at $4,824, with employers paying 84 percent.

From 2000 to 2004, premiums increased between 10 percent to 13 percent a year, the AP reported. The smaller premium increases in recent years may be due to the recession and the push for public health reform. Both factors discourage insurance companies from introducing large rate hikes, the report said.

But, the lower premium increases likely won't last, according to Kaiser CEO Drew Altman. "We've historically seen these peaks and valleys before, and we always have a bounce back effect," he told the AP.

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