Workers Paying Larger Percentage of Health Care Pr
Washington, September 28-- Health care costs are consuming a significantly greater share of Americans' incomes, which have grown far more slowly than their out-of-pocket medical expenses since 2000, according to a study released Tuesday from Families USA, a nonprofit group for health-care consumers, and the Lewin Group, an independent research firm.
Nationally, the amount workers paid for premiums rose 35.9 percent on average from 2000 to 2004 -- nearly three times faster than average U.S. earnings, which increased only 12.4 percent in that time, the study said. In 26 states, workers' premium costs jumped more than 40 percent.
The total combined share of worker and employer premiums for individuals grew to $3,798 this year from $2,864 in 2000, while family premiums jumped to $9,320 from $7,028, the study found.
The increases, the largest in at least a decade, have pushed employers to shift more of the costs to workers and reduce the number of benefits offered, Families USA executive director Ron Pollack said.
"Even though people are getting less coverage today, the premium increases over the past four years are simply unsustainable because earnings are not rising anywhere close to the rate premiums are increasing," Pollack said. "In effect, people are paying a whole lot more and getting a whole lot less."
Employers struggling to absorb the bulk of the increases have to make up their costs in other ways, he said.
"Working families get hurt in a variety of ways: No. 1, their premiums rise substantially; No. 2, the number of benefits covered gets reduced; No 3, they're at greater risk of becoming uninsured; and, finally, it depresses their wages," Pollack said.
The number of people whose total health care costs exceeded one quarter of their annual gross earnings also grew.
More than 14 million people have health care costs that exceed one fourth of their annual earnings in 2004, up about 23 percent from the 11.6 million who faced that ratio in 2000, the study said.
While the effect is less for insured people, even they haven't been entirely insulated. This year, 10.7 million insured Americans will see their medical costs surpass 25 percent of their earnings, according to the study.
Health costs include premiums, deductibles, copayments, coinsurance and costs for services not reimbursed by insurance companies.
Rising health care costs are driven by underlying factors such as rapidly rising pharmaceutical costs, hospital costs and the costs of caring for the uninsured, Pollack said.
"The costs of covering someone who can't pay for their care needs to be covered somewhere, and it typically occurs through cost sharing for people who have insurance," he said. "As we continue to see a significant increase in the number of uninsured, that's making a bad cost situation a whole lot worse."
About 45 million Americans lack health insurance for the entire year, according to the Census Bureau.
More than 85 million people were uninsured at some time from 2003 to 2004, an increase of 12.7 million from 1999 to 2000, when the number of uninsured was 72.5 million, Families USA found.
