LIFESTYLE
Health Premiums Grow Faster than Wages and Inflation
Published: Wednesday, September 12th 2012
Although health insurance premiums increased by a moderate amount, it still outpaced the growth in worker’s wages and inflation, according to a report by the Kaiser Family Foundation.
Annual premiums for employer-sponsored family health coverage rose by 4% to $15,745 with workers on average paying $4,316. Since 2002 premiums have increased by a total of 97%, which is three times as fast as wages and inflation.
“In terms of employee insurance costs, this year’s 4% increase qualifies as a good year, but it still takes a growing bite out of middle-class workers’ wages, which have been flat or falling in real terms,” Kaiser President and Chief Executive Officer Drew Altman, PhD, said in a statement.
Unfortunately, employers shifted more health care costs to their workers, so despite the modest 4% increase, middle-class employees, whose wages only advanced 1.7%, were paying more. The subject of soaring health care costs continues to be one of the top presidential campaign issues for voters.
On average, workers at lower-wage firms are paying an average of $1,000 more out of their paychecks for family coverage than workers at higher-wage firms. Workers at lower-wage firms are also more likely to face high deductibles than those at higher-wage firms with 44% of covered workers at firms with many low-wage workers facing an annual deductible of $1,000 compared to 29%.
“This year’s survey suggest that working families at the low end of the wage scale face significant out of pocket costs for coverage,” study lead author Gary Claxton, a Kaiser Vice President and director of the Foundation’s Health Care Marketplace Project, said in a statement. “Firms with many lower-wage workers ask employees to pay more out of pocket than firms with many higher-wage workers even though the coverage itself tends to be less comprehensive.”
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Grdankl Strong
October 11th, 2012 - 07:02:00 AM
It looks like Obamacare is not the premium-reducing panacea it was cracked up to be. It is likely to be worse if the full program kicks in in 2014. A few years ago, a member of PNHP (Physicians for a National Health Plan), who advocated a single-payor national health insurance plan along the lines of Medicare, nicely documented that the increase in health care costs since the 1970's was mostly due to government regulations and health care administrative costs. In turn, most of the increased administrative costs were due to keeping up with the government regulations! So, the modest, linear increases in physician & hospital fees were dwarfed by the near exponential increases in the regulatory and administrative costs. Across the board and around the world, government programs are virtually always more expensive and inefficient than private sector programs, because private sector programs have to compete with each other for consumer business. One proposal which seems reasonable is the following: 1) De-couple health insurance from employers. 2) Allow competition between insurance companies across state lines to broaden the base of competition and keep costs down. 3) Allow the formation of private buying groups by extended families, neighborhoods, companies & organizations to take advantage of bulk insurance premium rates. 4) Enact major tort reform, as lawsuits increase the cost of medications by 50% and the overhead cost to hospitals by 15%-20%, counting higher malpractice insurance premiums. Dragnet law firms should not be allowed to advertise for class-action suits. The attorneys' share of awards should be limited to 10%, rather than the 40% they now take, while advertising "justice" for their clients. Awards should be limited to the actual cost of damages, including future care stemming from a medical injury. "Pain and suffering" awards should be abolished. People eligible for the awards should be limited to people actually involved in the care of the patient, to avoid every imaginable dependent or hanger-on from joining the suit for a "piece of the pie". Physician liability should be limited to the actual, objective breach of standards of care, not to the level of dissatisfaction, anger or hurt on the part of the plaintiffs. 6) There should be some spreading of risk for potentially "expensive" patients or patients with pre-existing conditions and an elimiation of lifetime caps. This last measure would put upward pressure on costs, but all the other measures would press costs downward. In any case, government would be only a regulator, not a provider of health insurance.
