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WASHINGTON, Sep 14, 2005 (United Press International via COMTEX) -- The rise in health-insurance costs in the United States slowed for the second straight year in 2005, though fewer and fewer employers are offering coverage because of the burden on their budgets, a report released Wednesday shows.
Average premiums for employer-sponsored coverage rose 9.2 percent in 2005 after going up 11.2 percent the year before. Policies for the typical family of four now cost workers $2,713 per month, according to data compiled by the Henry J. Kaiser Family Foundation.
Despite the mitigation, rising costs continue to stress employers and workers severely, both of whom usually share the costs of medical insurance, which continues to be more and more difficult to afford, the Kaiser report said.
The U.S. Census Bureau reported last month that 45.8 million people in the United States now lack health insurance, even though most live in families with at least one full-time worker. Part of the reason is insurance prices continue to outpace wages, making coverage less affordable each year. In 2005 healthcare premiums increased more than three times as fast as wages and more than twice as fast as the rate of inflation.
At the same time, costs shouldered exclusively by employees -- including deductibles and co-payments -- also continued to increase.
"It is low-wage workers who are being hurt the most by the steady drip, drip, drip of coverage draining out of the employer-based health insurance system," said Drew Altman, the Kaiser Foundation's president.
For businesses, the effect is being felt most at small firms, which are seeing a steady erosion in their ability to afford medical coverage for workers. Nearly all large companies still offer health insurance to employees, but less than 60 percent of companies with fewer than 200 workers now provide coverage.
Employers typically pay about three-quarters of worker health-insurance premiums, which in 2005 averaged $10,880 per year. About 60 percent of all U.S. businesses offered health-insurance coverage for workers in 2005, down 5 percent from 2000. Most that do not offer coverage cite high costs as the reason, the report said.
Federal lawmakers have done little to address rising healthcare costs and the resulting erosion in insurance coverage, despite years of debate. Proposals from President George W. Bush to offer families $1,000 in tax credits to put toward insurance have been met with skepticism by both Republicans and Democrats, who argue the money will do little to help buy insurance that now costs nearly $11,000 annually for a family of four.
Bush also has backed the use of high-deductible insurance plans, which some workers can now purchase using tax-free health savings accounts. The plans are growing in popularity, with one-fifth of large companies now offering them as an option, the report said, adding that fewer than 1 million people have made use of the accounts so far.
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Todd Zwillich covers healthcare policy matters for UPI. E-mail: sciencemail@upi.com
Copyright 2005 by United Press International.
