- The Washington Times - Tuesday, September 26, 2006

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. Thompson, chairman of the Deloitte survey and former secretary of the Health and Human Services Department.

Instead, the study found that employers are turning their attention toward wellness programs and disease-management programs. The percentage of employers who said their strategies for controlling health care costs include wellness programs jumped from 21 percent in 2003 to 38 percent in 2006.

The Kaiser survey found that smaller businesses feel the pinch of rising health care costs more than larger companies. Fewer than half of the small employers surveyed — companies with three to nine employees — offer health benefits while employers with 200 or more employees are extremely likely to offer health insurance, the survey said.

“About two in five small businesses do not even offer health insurance, and those that do require workers on average to contribute significantly more to their premiums for family coverage than in prior years,” said Health Research and Educational Trust President Mary Pittman.

Despite support from the Bush administration as a solution to high health care costs, workers and employers are not pursuing consumer-driven health plans, the Kaiser survey indicated.

Only about 4 percent of employees with employer-sponsored coverage are enrolled in a health savings account while few employers are apt to adopt a high-deductible plans, the survey said. Kaiser estimates that 2.7 million workers are signed on to a high-deductible plan with a savings account, up from 2.3 million last year.

“We don’t know yet whether workers and employers ultimately will embrace consumer-driven health plans in big numbers, but it certainly hasn’t been a tidal wave,” said Kaiser Family Foundation Vice President Gary Claxton, a co-author of the study.

The Kaiser survey sampled 2,122 public and private businesses and received a 48 percent response rate.

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