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Health Insurance Costs Rising As Fewer Jobs Offer Coverage

Posted on: Wednesday, 10 November 2004, 03:00 CST

EMPLOYER-BASED health insurance premiums rose five times the rate of inflation in 2004, and as health care became less affordable, at least half of all Americans saw their insurance cut or paid more for doctor visits.

The Kaiser Family Foundation released a report in September that found that premiums for employer-sponsored health coverage rose 11.2 percent in 2004, which was less than 2003's 13.9 percent increase but still the fourth consecutive year of double-digit price hikes. The 2004 Annual Health Benefit Survey also found the percentage of workers covered by employer-based insurance is at 61 percent, down from the recent peak of 65 percent in 2001. The numbers mean at least 5 million fewer jobs are providing health insurance.

"The cost of family health insurance is rapidly approaching the gross earnings of a full-time minimum wage worker," said Kaiser Family Foundation President Drew Altaian. "If these trends continue, workers and employers will find it increasingly difficult to pay for family health coverage, and every year the share of Americans who have employer-sponsored health coverage will fall."

Measures of insurance coverage and premium costs continue to paint a bleak picture. A report released Sept. 28 by Families USA found that in 35 states, workers' share of their insurance premiums rose three times faster than their earnings even as benefits were cut. Nationally, workers' premium costs rose 35.9 percent from 2000 to 2004, according to the report, while average earnings rose only 12.4 percent during the same period.

"Working families were squeezed by runaway health care costs over the past four years," said Ron Pollack, executive director of Families USA. "As a result, workers are paying much more in premiums but are receiving less health coverage, wages are being depressed and millions of people have lost health coverage entirely."

The number of Americans who had total health costs that consumed more than one-quarter of their earnings rose from 11.6 million in 2000 to 14.3 million in 2004 - an increase of almost 23 percent. The overwhelming majority of these people, 10.7 million, had health insurance.

The proportion of low-income, working-age people with chronic conditions such as asthma and diabetes who spend more than 5 percent of their income on out-of-pocket medical costs jumped from 28 percent in 2001 to 42 percent just two years later, according to a late-September study from the Center for Studying Health Care Change. The study also found that more than one-third of privately insured, chronically ill people with incomes below 200 percent of the federal poverty level lived in a family having problems paying their medical bills.

In yet more disturbing news, 100 million Americans found their health insurance benefits cut or costlier in 2004, according to a report from Results For America, a project of the non-profit Civil Society Institute. The survey of about 1,000 adults found that 67 percent support guaranteed, government-sponsored health care.

APHA strongly supports affordable health care and a single-payer health system that would provide universal insurance coverage to every American regardless of income or job status.

A summary of the Kaiser Family Foundation/Health Research and Education Trust 2004 Annual Employer and Health Benefits Survey is available from . The Families USA report, "Health Care: Are You Better Off Today Than You Were Four Years Ago?," is posted at . Visit to view "Americans and Health Care Reform: How Access and Affordability Are Shaping Views." The brief on "Rising Health Costs, Medical Debt and Chronic Conditions" is available from .

Copyright American Public Health Association Nov 2004

Source: Nation's Health, The

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