US Health Insurance Costs Rise Nearly Twice as Fast as Pay: Survey

The cost of health insurance in the United States climbed nearly twice as fast as wages in the first half of 2007, with family coverage costing employers around 1,000 dollars (714 euros) a month, a poll showed Wednesday.

Premiums for employer-sponsored health insurance rose an average of 6.1 percent in 2007, while wages went up by 3.7 percent, the Employer Health Benefits Survey released by the Kaiser Family Foundation and the Health Research and Educational Trust showed.

The 6.1 percent rise in health insurance premiums marked a slowdown from the rate of increase last year, but also strongly outpaced inflation, running at 2.6 percent.

"In 2007, the increase in health insurance premiums was about twice the rate of inflation and not quite twice the increase in workers' pay," Kaiser vice-president Gary Claxton said in a webcast.

Premiums for family coverage have surged by 78 percent since 2001, while wages have gone up 19 percent.

The average premium for family coverage in 2007 was just over 12,000 dollars, with workers having to pick up part of the cost.

Workers contributed, on average, 273 dollars a month towards family health coverage packages, up from 248 dollars last year, the survey, which polled just over 3,000 public and private employers with three or more workers during the first five months of 2007, showed.

"Every year health insurance becomes less affordable for families and businesses. Over the past six years, the amount families pay out of pocket for their share of premiums has increased by about 1,500 dollars," Drew Altman, chief executive of Kaiser, said in a statement.

Employers in the United States offer health insurance packages as a worker benefit.

In 2007, 60 percent of US firms offered health benefits.

That was down by nine percentage points on companies offering health care packages in 2000, the survey showed.

Low-paid workers were found to have the fewest healthcare options, because the small firms they tend to work for are less likely to offer coverage.

The high cost of premiums was cited as a main reason firms fail to provide healthcare coverage to their employees.

A survey released last month by the US Census Bureau showed that 47 million people had no health insurance in the United States last year, up from 44.8 million in 2005.

Source-AFP
SRM /J