4-30-08, 9:14 am
Rising family health insurance premiums have eaten into more than half of what little income gains working households have seen in recent years, a report by a private foundation released Apr. 29 revealed. Between 2001 and 2005, the cost of the portion of family health insurance premiums paid for by workers who get their insurance through their job has risen 30 percent, while their incomes on average have grown only 3 percent, according to a new study by the Robert Wood Johnson Foundation.
The study conducted at the University of Minnesota for the foundation concluded that 'the dollar amount that workers contribute has substantially increased.' The study showed that the average cost of employee-based family insurance jumped almost $2,500 between 2001 and 2005 from $8,281 to $10,728, and the dollar amount workers have had to contribute to the cost of family insurance increased by $664.
The increase in median income for working families who get their family insurance through their workplace grew by a mere $1,250 over the same time. The cost of family insurance alone wiped out more than half of that income gain.
At the release of the report, Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation, called on elected officials to act to reform the health care system. 'This study makes plain what every working parent knows – that providing insurance coverage takes a bigger bite from the family budget every year,” she said.
The report found that 4.1 million more people worked in private-sector jobs that offered no health insurance in 2005 than in 2001. Over the time frame under study, about 30,000 fewer employers offered insurance to their employees. More than 2 million Americans lost their insurance between 2001 and 2005, raising the total number of uninsured to 47 million people.
“There is a clear connection between the rising cost of health care and the increasing number of uninsured Americans. As costs continue to go up, fewer people can pay their portion of the premium, and fewer employers are able to offer insurance benefits,' Lavizzo-Mourey stated.
According to a recent AFL-CIO survey of more than 26,000 workers, the surge in premium costs has most workers worried about losing their coverage, even when they have work-based coverage. About one-third complain of difficulties paying for medical costs, and many have delayed seeking medical care due to costs.
The Robert Wood Johnson study may not tell the whole story either, according to information provided by the Hewitt Health Value Initiative for the AFL-CIO. In addition to premium costs, workers who have insurance through their employers also pay co-payments and deductibles. Altogether, these costs for medical care suggest that on average workers with work-based benefits paid slightly more than half of the total cost of their care in 2005, the final year of the Robert Wood Johnson Foundation study. These total costs are projected to increase an additional $425 by the end of 2008.
While these numbers do not include separate analysis for the total out-of-pocket expenses for family insurance specifically, it does suggest a shortcoming in the Robert Wood Johnson Foundation study.
Still, the faster-than-inflation growth of health insurance premiums and the related cost to working families of medical care combined with a radical reduction in the number of employers willing to provide coverage for workers suggests the health care crisis will not end without major intervention by the government.
The situation requires a national plan that contains a mix of private and public solutions that cover everyone, control costs, and provide real choices, said AFL-CIO President John J. Sweeney on a recent teleconference. The national scope of the crisis can no longer be resolved from employer to employer or in union contracts, he suggested.
Heather Booth, who heads the AFL-CIO's national health care campaign, asserted that growing costs such as those revealed in these studies, show that the plan offered by John McCain is simply unfeasible. 'McCain would tax individuals’ health care benefits, which would only drive many more people out of coverage,' she said, adding that his plan for a health care tax credit is far too little to ensure universal coverage or even offset the mounting costs working families face.
In rejecting McCain's health care benefits tax plan, Sweeney said, 'The AFL-CIO will make sure that voters understand which candidates are committed to real health care reform and which ones are just paying lip service.” Sweeney praised the universal health care plans of both Democratic presidential frontrunner Barack Obama and his opponent Hillary Clinton as closest to the goals of the AFL-CIO.
--Reach Joel Wendland at
