Cost of Insuring Workers' Health Increases 11.2%

New York Times 09/10/04
author: Milt Freudenheim
c. 2004 New York Times Company

The cost of providing health care to employees has risen 11.2 percent this year, according to the results of an authoritative national survey reported yesterday.

It was the fourth consecutive year of double-digit increases in health insurance premiums, which has resulted in a steady decline in the number of the nation's workers and their families receiving employer health care coverage.

The annual survey of 3,000 companies, conducted between January and May by the Kaiser Family Foundation and Health Research and Educational Trust, is considered a reliable indicator of health care costs paid by companies and their workers.

Perhaps the only good news in the report was its indication that the rate of increase slowed from the record 13.9 percent in 2003, turning down for the first time since 1996. But this year's jump was still more than five times the national 2.2 percent increase in wages from the spring of 2003 to spring 2004, as reported by the Bureau of Labor Statistics.

Small businesses are being especially hard hit as the average family coverage in preferred provider networks, the most common type of health plan, has risen to $10,217, with employees paying $2,691 of the total. In response to the soaring costs, many small companies are simply no longer offering coverage of a worker's spouse and children.

"Small employers just cannot afford to spend the bulk of $10,000 on a family health plan for a $30,000 employee," said Kate Sullivan Hare, the executive director of health care policy for the United States Chamber of Commerce. That same family coverage "used to cost $4,500 about six years ago," she noted.

...

The Census Bureau said last month that the nation's total number of uninsured people had risen by 1.4 million in 2003, to a record 45 million.

Reed Dickens, a spokesman for the Bush-Cheney campaign, said: "This administration has helped slow the rate of increase for the first time in seven years. The president's approach to this is a consumer-driven approach, and John Kerry's philosophy is to shift the decision-making power to the federal government and shift the financial burden to the taxpayer."

We need to do something about this. I wonder if anybody understands why costs are rising? What exactly costs 12% more this year than last? And then 14% more than the year before that? Inflation isn't that high. Are Health Care companies' profits going up? Are doctor's costs going up? Where exactly in the chain are the costs increasing at these rates? We must understand the problem, before we can solve it.

We need better investigative reporting that tells us really where the costs are increasing. I know my health care costs are rising. Tell me why.