On April 23, the Urban Institute released a report on the effect of large health insurance premium increases greater than the rate of growth of healh care costs on access to coverage, costs, and decisions by small firms on whether to offer employer-sponsored coverage.  The report explains that such increases would cause a significant loss of coverage across all demographics, but that low and middle-income families and older nonelderly adults would be the most adversely affected.

From the report: In this report, we examine the effects on coverage, costs, and small employer decisions to offer insurance under different scenarios for general increases in individual and ESI premiums. We begin with a baseline scenario for 2010, in which premium increases from the preceding year are driven by rates of cost growth projected by CMS. We then simulate two scenarios in which premiums rise at a significantly faster rate than baseline premium growth: an intermediate scenario in which ESI premiums increase 6 percent for large firms, 10 percent for small firms, and 20 percent in the individual market, and the largest increase scenario, with ESI premiums rising 9 percent for large firms, 20 percent for small firms, and 30 percent in the individual market.

Full report: The Effects of Large Premium Increases on Individuals, Families, and Small Businesses (PDF | 318.21 KB)

Urban Institute.  (2010).  The effects of large premium increases on individuals, families, and small businesses.  Buettgens, M., Garrett, B. and Holahan, J.