- The Washington Times - Tuesday, September 11, 2007

Employer-sponsored health insurance premiums increased more than 6 percent this year, continuing to outpace wage gains and inflation, according to a national survey released today.

The 2007 premium increase of 6.1 percent was the smallest annual rise since 1999, when health premiums rose 5.3 percent, the Kaiser Family Foundation report says. Last year’s increase was 7.7 percent.

Drew Altman, president of the nonprofit health care consulting firm in Menlo Park, Calif., said the survey results show health care costs are in a period of moderate growth. However, because premiums for family coverage in employer health plans have increased by 78 percent since 2001, health insurance has become increasingly unaffordable for employees.

“Premiums for family coverage now top $12,000 annually,” he said. “Every year, health insurance becomes less affordable for families and businesses.”

The total average annual cost for family coverage premiums rose to $12,106, and the average monthly premium for a family is $273, up from $248 last year, the survey shows.

Advances in medical technology and higher insurance company profit margins are primary contributors to rising premiums, researchers for the Kaiser survey said.

Employers are seeking to cut their health care costs by passing on expenses to workers through higher copayments, increased deductibles and more out-of-pocket spending. Over the past seven years, the number of small employers offering health insurance has dropped from 58 percent to 45 percent.

“We are not falling off a cliff, but we are witnessing a slow but certain erosion of the employer-based health insurance system,” said Gary Claxton, vice president at Kaiser.

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