Premiums for Health insurance Soar

An annual survey of employers has revealed that premiums for employer-based health insurance has risen over twice as fast as overall inflation and wages, Fo the seventh straight year.

The Kaiser Family Foundation, which is a nonprofit educational group and the Health Research and Educational Trust released a survey on Wednesday which showed that I the premium increase was 7.7 percent, in 2006, the least since 2000 marking the third straight year of reduced rate of growth.

However individual Americans have felt little or no relief because salaries haven't kept pace with the rate hikes. It has been found that since 2000, inflation has jumped 18 percent with the amount that workers pay toward family health-care coverage skyrocketing by 84 percent. Average wages have also increased 20 percent over the same period.

Therefore experts state that the present moderation in premium-rate increases does not give much reason to rejoice. Drew Altman, the president of the Kaiser Family Foundation said, "I think you immediately understand why a reduction in an already high rate of increase is pretty meaningless to average working people and why they're still feeling the pain."

This year, the average annual premium for single coverage is $4,242, of which workers pay $627, up from $610 in 2005. Family coverage costs an average of $11,480, with workers paying $2,973 annually, up from $2,713 last year. The survey found that since 2000, workers' annual contributions have increased on average by $293 for single coverage and by $1,354 for family coverage.

Rising health-care costs have forced many companies to scale back or drop coverage. Five million fewer workers are receiving job-based coverage in 2006 than in 2000, the survey found. And the percentage of firms that offer health benefits has fallen from 69 percent in 2000 to 61 percent this year.

That's prompted concerns that the job-based health insurance system, which covers nearly 175 million Americans, could unravel in the face of runaway costs. With employers requiring workers to pay higher out-of-pocket costs several millions of low-income workers are especially at risk. The number of uninsured Americans has grown for five straight years, with 46.6 million lacking coverage in 2005.

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In spite of polls showing that health care is a primary concern for families, health care still has not become a top issue for voters in this congressional election year. Altman said, "As a result, health care has little real traction right now as a political issue."

The survey, which is released each year as workers begin open enrollment in health plans, is widely considered the nation's best measure of employer-based coverage. It's based on telephone interviews conducted from January to May with officials from more than 2,000 public and private employers. The response rate was 48 percent.

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Despite the rising costs, the percentage that employers pay toward single and family coverage premiums - 84 percent and 73 percent, respectively - is virtually unchanged over the last few years.Smaller firms are most likely not to provide coverage.

According to Jon Gabel, a co-author of the report and the vice president of the Center for Studying Health System Change, premium growth had slowed over the last three years because lowered prices is expected to keep prices low so that market share is improved. He said a lack of new blockbuster drugs also had helped by holding down growth in prescription-drug prices.

The survey found that 7 percent of employers offer high-deductible health plans with savings options, such as tax-favored health savings accounts, that can be used to pay medical expenses. Still, in spite of the heavy promotion by the Bush administration only 4 percent of covered workers are in such plans.



Source-Medindia
NLA