Rising Health Care Cost

According to a Kaiser Family Foundation survey, premiums for employer
-provided health insurance in the U.S. rose 9.2% in 2005. This is after 4
successive years of double-digit increases but this slower rate is certainly
not a good news. Even this slower rate of increase still has health
insurance premiums rising more than twice as fast as overall inflation
(3.5%), and more than three times faster than workers' wages (2.7%).

Since 2000, premiums for coverage for a family have increased by 73%,
compared with inflation growth of 14% and wage growth of 15%. In dollar
terms, average annual premiums for employer-sponsored coverage rose
to $4,024 for single coverage and $10,880 for family coverage, according
to the report. The family coverage of about $11000 is about equal to the
full-time earnings of a minimum-wage worker.

That is why more companies that offer health benefits are offering high-
deductible plans (defined as $1,000 deductible for single coverage,
$2,000 for family coverage): In 2005, 20% of firms offered such plans,
up from 10% last year and 5% the year before. About 56% of workers
with coverage are in a health plan that requires that a deductible be met.
In PPOs (preferred provider organizations), the average deductible for
in-network services is $323 for single coverage and $679 for family
coverage. Enrollment in PPOs grew over the last year while HMO (health
maintenance organization) enrollment declined. PPOS enrolled 61% of
employees with health coverage, up from 55% in 2004 and remain the
most common type of plan. This year, one-third of firms with 200 or
more workers are offering retiree coverage, about the same as last year
but down from 66% in 1988.