Escalating Health Insurance Premiums Outpace Wages

Armen Hareyan's picture
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Health Insurance Premiums

Health insurance premiums for 2005 rose three times faster than the growth in wages, according to a Kaiser Family Foundation report out today. Timothy McBride, Ph.D., a health economist and division head of health policy at Saint Louis University School of Public Health, is available to provide perspective.

"The increase in health insurance premiums means one thing to workers: Their take home pay is going to rise very slowly. If the employer pays most of the health insurance premium, they will have less left over for wage increases," McBride says.

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"If employers pass the increase in premium costs on to employees, then it will be taken out of our paychecks and will result in less take-home pay. Either way, our take-home pay will not be rising as fast because more is going to health insurance premiums."

The second trend outlined in the report, one that McBride calls "alarming," is the decrease in the percentage of employers offering health insurance. Just five years ago, 69 percent offered health insurance, and now only 60 percent do.

"It's one of the main reasons why, if not the main reason why, the number of uninsured continues to rise in this country," McBride says.

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