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National Institute for Health Insurance Reform

One little guy - one big goal - fix a broken system. mailto:rereason@hotmail.com

Thursday, September 15, 2005

Employer Provided Health Insurance Continues Decline

About 9% fewer employers offered health insurance benefits to their employees in 2005 than did so in 2000. According to a new study published by the Kaiser Family Foundation, the number fell from 69% to 60%. Nearly all the decline comes from small businesses, defined as those having fewer than 200 employees.

Higher costs undoubtedly drive smaller businesses out of the health insurance game, as premiums continue to skyrocket up. Premiums went up 73% since 2000; including a 9.2% increase in 2005. . In contrast to health insurance premiums, the current rate of overall inflation is just 3.5%. Of course, real earnings are increasing by even less, at 2.7%. The rate of the 2005 increase in premiums works out to 3.4 times as much as the rate of increase in earnings. That is, health insurance premiums are increasing at a rate 3.4 times faster than earnings.

Interestingly, the 2005 average annual premium for family health insurance of $10,800 is now a little more than the amount of earnings from full-time work at minimum wage, which is $10,712.

The study did not raise the larger issue of why we expect the local McDonald's to ante up the lion's share of healthcare costs for its workers. That's what this blog is for.