Medical Insurance Cost Increases Slowing

Health insurance premiums have been on the rise for the last several years. In fact, recent years have seen double digit increases. In 2004, the increase was 11.2% and 13% in 2003. In 2005, the average premium price only rose by 9%. Despite that reduced increase in premiums, more employers are deciding to cut their coverage for employees. Even when employers do offer the coverage, workers are being expected to cover a larger percentage of those costs as well.

The Henry J. Kaiser Family Foundation found that a family of four's family health insurance plan through an employer costs them $2,713 every year. In comparison, employers' average bill per employer was just over $10,000. When premium costs go up, businesses can either absorb those costs or pass on a portion to their workers. Both options are hurting employers and their employees. However, employees are also being forced to single-handedly pay their own co-insurance, deductibles, and copayments which are also increasing. That means a larger percentage of workers' income is going towards their health insurance expenses.

The situation for workers may get worse before it gets better since more and more employers are opting to eliminate health care benefits because of the high costs. Currently, about two-thirds of Americans receive their health insurance from an employer. However, the number of businesses offering health insurance decreased by 5% between 2000 and 2005. Most large corporations do still offer health insurance benefits, but it's the smaller businesses which feel the pinch first. In fact, less than 60% of companies employing fewer than 200 workers offer health insurance benefits.

Currently, more than 45 million Americans are living without medical insurance according to the U. S. Census Bureau. The majority of uninsured Americans are either employed full-time or live in a household with at least one full-time worker. These individuals either work for employers who do not offer health care or can not afford to pay the premiums. As fewer employers offer the benefit, the number of uninsured individuals will continue to grow as well.

Of course, some efforts have been made to address these problems. The Bush Administration proposed offering $1,000 tax credits towards the purchase of medical insurance. The annual costs for a family of four, however, is more than $11,000 so such a small tax credit would have little impact on most individuals. The Health Savings Account (HSA) plans also touted by the government have been adopted by about 20% of businesses but are being used by less than 1 million individuals. Many people balk at having to pay the high deductibles associated with the plans. Despite these efforts, the government has made no plans to reign in the rising costs of health care which is hurting workers and businesses.

Some states are working on their own health insurance solutions. As with the federal government, the focus with most of these solutions has been on getting everyone insured and not on controlling the rising costs.

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