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Health Premiums Grow Faster than Wages and Inflation


Although health insurance premiums increased by a moderate amount, it still outpaced the growth in worker's wages and inflation, ensuring that soaring health care costs will continue to be a top presidential campaign issue.

Although health insurance premiums increased by a moderate amount, it still outpaced the growth in worker’s wages and inflation, according to a report by the Kaiser Family Foundation.

Annual premiums for employer-sponsored family health coverage rose by 4% to $15,745 with workers on average paying $4,316. Since 2002 premiums have increased by a total of 97%, which is three times as fast as wages and inflation.

“In terms of employee insurance costs, this year’s 4% increase qualifies as a good year, but it still takes a growing bite out of middle-class workers’ wages, which have been flat or falling in real terms,” Kaiser President and Chief Executive Officer Drew Altman, PhD, said in a statement.

Unfortunately, employers shifted more health care costs to their workers, so despite the modest 4% increase, middle-class employees, whose wages only advanced 1.7%, were paying more. The subject of soaring health care costs continues to be one of the top presidential campaign issues for voters.

On average, workers at lower-wage firms are paying an average of $1,000 more out of their paychecks for family coverage than workers at higher-wage firms. Workers at lower-wage firms are also more likely to face high deductibles than those at higher-wage firms with 44% of covered workers at firms with many low-wage workers facing an annual deductible of $1,000 compared to 29%.

“This year’s survey suggest that working families at the low end of the wage scale face significant out of pocket costs for coverage,” study lead author Gary Claxton, a Kaiser Vice President and director of the Foundation’s Health Care Marketplace Project, said in a statement. “Firms with many lower-wage workers ask employees to pay more out of pocket than firms with many higher-wage workers even though the coverage itself tends to be less comprehensive.”

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