[From the diaries by susanhu.]

The cost of health insurance for working Americans climbed 9.2 percent this year, the lowest rate of increase since 2000 but still far ahead of both general inflation and workers’ pay increases, according to a nationwide survey by the Kaiser Family Foundation.

On average, health insurance for a family cost $10,880 this year, with the employer paying $8,167 and the worker $2,713, the survey found. The total cost almost exactly matches the total annual earnings of a person working full time at the minimum wage, the survey noted.

At the same time, the proportion of employers providing health insurance continued its steady decline, falling to 60 percent this year from 69 percent five years ago. Most of the decline was among very small companies, the survey found, noting that less than half — 47 percent — of firms with three to nine workers now offer medical coverage to their employees.

This year is the second in a row with a slower rise in premiums, slipping from 11.2 percent last year and 13.9 percent in 2003. That 2003 rise capped an unbroken string of progressively higher increases dating back to 1996.

The current “next big thing” is what has been dubbed “consumer-driven” health care, which combines high-deductible insurance with a fund that the individual can use to cover routine costs. In these arrangements, consumers are allowed to accumulate unspent money in the fund, giving them, theorists argue, an incentive to shop and eliminate unnecessary spending.

First, let’s place these premium increases in perspective.  According to the Bureau of Labor Services, wages for non-supervisory employees have grown 13.24% from January 2001 to July 2005.  Over the same time, inflation increased 11.59%, making inflation adjusted wage growth 1.6% over a five and a half year period.  

So, health insurance increased 13.9% in 2003, 11.2% in 2004 and 9.2% this year.  Over the same time, wages have been near stagnant after inflation.  In other words, premiums are taking a larger percentage of a consumer budget that is essentially stagnant.

But that’s not the end of this situation.  Employers are using higher deductible policies.  So not only is the average American family paying more for insurance, they are also paying more in the form of deductible payments.  This hidden cost further eats into the near stagnant wages.

More importantly, fewer small companies – which employ most Americans – are providing heath insurance.  So, assuming a person has a job, it’s less likely they will be able to get insurance through their employer.

Is anybody listening?  Americans are still losing out in this situation.  


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