Healthcare Costs More Than Workers' Wages: Study

The cost of health insurance in the U.S. has exceeded worker's monthly wages, according to a new study carried out by Kaiser Family Foundation.

The findings from the study come at a time the Americans are already being grappled with a weak economy and job losses.

Annual premiums for employer-sponsored family health coverage rose 9 per cent in 2011 to $15,073. Out of that, on average, workers pay $4,129 and employers pay $10,944 toward those annual premiums.

The study showed that premiums increased 2.1 per cent faster than workers' wages and 3.2 per cent more than the general inflation. Since 2001, family premiums have increased 113 per cent, compared with 34 per cent for workers' wages and 27 per cent for inflation.

This year's nine percent increase in premiums is especially painful for workers and employers struggling through a weak recovery, Kaiser President and CEO, Drew Altman, Ph.D. said.

In particular, the survey estimates that employers added 2.3 million young adults to their parents' family health insurance policies as a result of the health reform provision that allows young adults up to age 26 without employer coverage on their own to be covered as dependents on their parents' plan. Young adults historically are more likely to be uninsured than any other age group.

The law is helping millions of young adults to obtain health coverage. In the past, many of these young adults would have lost coverage when they left home or graduated college, said study lead author, Gary Claxton, a Kaiser vice president and co-executive director of the Kaiser Initiative on Health Reform and Private Insurance.

The study also found that 31 per cent of covered workers are in high-deductible health plans, facing deductibles for single coverage of at least $1,000, including 12 per cent facing deductibles of at least $2,000.

Covered workers in smaller firms are more likely to face such high deductibles, with half of the workers in smaller firms facing deductibles of at least $1,000, including 28 per cent facing deductibles of $2,000 or more, according to the study.

The study showed that premiums for worker-only health coverage increased 8 per cent in 2011 to $5,429, while workers on average pay $921 toward this coverage.

The survey was conducted between January and May of 2011 and included 3,184 randomly selected, non-federal public and private firms with three or more employees.