Premium hikes still outpacing wage increases

As fewer employers are able to offer health coverage, it's low-wage workers who feel the effects the most.

By Joel B. Finkelstein, AMNews correspondent. Oct. 3, 2005.

Washington -- There is little good news in the recent finding that U.S. employers paid, on average, 9.2% more to provide health insurance to their employees this year than they did last.

While that figure from the Kaiser Family Foundation's 2005 Annual Employer Health Benefits Survey marks the second year in a row that the rise in health insurance premiums has been slower than the year before, health insurance is still becoming an unaffordable commodity for an increasing number of America's working families. And the survey showed that patients are being faced with higher deductibles, increased premiums and more cost sharing.

"Cost and accessibility of health care significantly impact how individuals manage their own care," said Mary Pittman, PhD, president of Health Research Educational Trust, which partners with Kaiser on the annual employer survey.

Another recent survey from the Robert Wood Johnson Foundation suggests that this becomes an even bigger issue as companies pass more of the increasing cost of health insurance onto employees.

According to that survey, employers anticipating another increase in their premiums next year, intend to pass along, on average, 21% of the rise to their workers.

That could impact the care individuals and their families seek, Dr. Pittman said. She noted a report published last year in Health Services Research that showed that hospitalizations for preventable conditions increased as HMOs gave way to insurance companies that didn't pay for comprehensive preventive care.