Employer-Sponsored Health Insurance Premiums for Family Coverage Rose 10 Times Faster Than Income, Report Finds

Employer-sponsored health insurance premiums for family coverage increased more than 10 times faster than U.S. employees' median incomes from 2001 to 2005, according to a report released Tuesday by the Robert Wood Johnson Foundation, the Washington Post reports (Washington Post, 4/29). For the report, researchers from the State Health Access Data Assistance Center at the University of Minnesota analyzed data from the U.S. Census Bureau and the Medical Expenditure Panel Survey conducted by the Agency for Healthcare Research and Quality (Forster, St. Paul Pioneer Press, 4/28). RWJF released the report in conjunction with National Cover the Uninsured Week (Anstett, Detroit Free Press, 4/29).

According to the report, what workers paid toward premiums for family coverage increased 34.6% from $1,921 in 2001 to $2,585 in 2005, while median family income rose 3.1% from $40,818 to $42,068 during the same period (Washington Post, 4/29). The report also found that the percentage of health insurance premiums covered by employees increased to 24.1% in 2005 from 23.2% in 2001 (Park, Arkansas Democrat-Gazette, 4/29). In addition, the number of people with private coverage dropped by about 6% from 2001 to 2005, while the number of private-sector employers that offered health insurance declined by 0.8%, the report found (St. Paul Pioneer Press, 4/28). Premium increases contributed to 2.4 million fewer U.S. residents with private health coverage in 2005 than in 2001, according to the report.

Reaction
RWJF President and CEO Risa Lavizzo-Mourey said, "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" (Krouse, Cox/Raleigh News & Observer, 4/29). She added, "This research shows that an ever-increasing number of people will join America's uninsured unless our nation's leaders act to reform our health care system."

Sen. Blanche Lincoln (D-Ark.) said the report provides strong evidence to "jump start" Congress to act on a bill (S 2795) that would allow small businesses to form statewide or nationwide health insurance pools (Arkansas Democrat-Gazette, 4/29).

The report is available online.