Health insurance premiums outpace wage increases

Premiums for employer-sponsored health insurance rose an average of 6.1 percent in 2007 -- considerably higher than the increase in wages (3.7 percent).

The 2007 Employer Health Benefits Survey from the Kaiser Family Foundation reported the increase was down from the 7.7 percent increase last year.

The 6.1 percent average increase this year was the slowest rate of premium growth since 1999, when premiums rose 5.3 percent. Since 2001, premiums for family coverage have increased 78 percent, while wages have gone up 19 percent and inflation has gone up 17 percent.

The average premium for family coverage in 2007 is $12,106, and workers on average now pay $3,281 out of their income.

“We’re seeing some moderation in health-cost increases, but premiums for family coverage now top $12,000 annually,” said Drew E. Altman, Kaiser president. “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.”

The percentage of the work force obtaining coverage from employer-sponsored plans remains unchanged since 2006. The 60 percent of firms offering health benefits to at least some of their workers is statistically unchanged from last year’s offer rate (61 percent). The offer rate remains significantly lower than it was in 2000, when 69 percent of firms offered health benefits. Nearly all (99 percent) large businesses with at least 200 workers offer health benefits to their workers this year, but fewer than half (45 percent) of the smallest firms with three to nine workers offered benefits.

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For more: Kaiser Family Foundation, (650) 854-9400; www.kff.org/insurance/7672.