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Employees Bearing the Burden of Health Insurance Hikes

A study released this week reported that employers are shifting most of the increase in health insurance premiums to their workers. The study is conducted annually by the Kaiser Family Foundation and the Health Research & Educational Trust.

Premiums increased 14 percent this year. On average, companies are paying insurers $495 more for family coverage in 2010 than they paid in 2009. Workers are picking up about $482, or 97 percent, of that. A Kaiser Family Foundation representative said he can't remember another time when employers moved "so boldly to shift health costs to workers."

The operative word is "boldly." Workers have been picking up the steadily growing health care tab for a while now. In the past five years, employees have seen a 47 percent increase in their share of the premium, though insurers have only increased their premiums by 27 percent.

The impact of the increase on workers is exacerbated by general economic conditions. Wages, for example, climbed only 18 percent -- not much when the 12 percent inflation rate is taken into account. Health care costs continue to outpace both wage increases and inflation rates.

Companies are in "recession survival" mode, said the Kaiser representative. And, as employers struggle through the recession, they must make tough financial decisions.

The survey also reported that 30 percent of employers reduced benefit packages or increased out-of-pocket costs, including deductibles. Deductibles are set at $1,000 or higher for 27 percent of covered workers.

So, the burden on households will likely hit more than their wallets. With coverage reduced and out-of-pocket expenses increased, families and individuals will face choices about their health that could have long-term consequences. Forgoing a mammogram, for example, could lead to both a health crisis and a financial catastrophe.

The 157 million Americans covered by employer-sponsored health insurance pay, on average, $13,770 per year for family coverage and $5,049 for individual coverage. Individuals saw a 15 percent bump over last year, while families saw only a 3 percent increase. Higher costs, reduced benefits -- even more insecurity for workers in already tough times.

Resource: The Miami Herald "Survey: Employers Shift More Insurance Costs to Workers" 9/2/10

 

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