Health Care Costs Outstrip Pay, Inflation

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Byline: Gregory Lopes, THE WASHINGTON TIMES

The rising cost of health care slowed for the nation's employers and workers this year but still managed to outpace the growth rate of wages and inflation, a nationwide survey found yesterday.

Premiums for employer-sponsored health plans rose 7.7 percent this year, the slowest rate of growth since 2000 and below the 9.2 percent growth rate of 2005, according to the Kaiser Family Foundation's 2006 Employer Health Benefits Survey.

"While premiums didn't rise as fast as they have in recent years, working people don't feel like they are getting any relief at all because their premiums have been rising so much faster than their paychecks," said Drew Altman, president of the Kaiser Family Foundation, adding that premiums have increased 87 percent in the past six years.

This year's increase in premiums doubled workers' wage increase of 3.8 percent and the overall rate of inflation, which rose 3.5 percent.

More than 155 million people in the United States are enrolled in employer-sponsored health insurance as their primary coverage, more than any other source of coverage.

Technological advances and an aging population are factors causing skyrocketing health care costs that are forcing employers to cut benefits or implement innovative methods to curb costs.

In 2006, family health coverage costs an average of $11,480 annually, with workers paying nearly $3,000 in premiums, the survey said. A single plan now costs $4,242, employees paying about $50 a month.

"We're not falling off a cliff but we continue to see an erosion of coverage," Mr. Altman said.

Another study released yesterday by the Deloitte Center for Health Solutions found that while some major U.S. employers plan to implement some type of consumer-driven health plan in the next five years, employers do not think those plans alone will significantly curb costs.

"Employers have a real opportunity to start managing consumption and curbing health care costs through consumer-directed health plans and other wellness and care-management programs," said Tommy G. …