If there is any positive news in the health insurance crisis, it is that premiums climbed only 9.2 percent this year as compared to 11.2 percent in 2004 and 13.9 percent in 2003. But that is little consolation to those workers who find that the increased cost of health insurance is still more than three times the growth in their earnings (2.7 %) and two-and-a half times the rate of inflation (3.5%)—and that nearly 47 million Americans have no insurance at all.These statistics were made available in the 2005 Annual Employer Health Benefits Survey recently released by the Kaiser Family Foundation and Health Research and Educational Trust. The survey found that only 60 percent of companies offered coverage to their employees in 2005, down from 66 percent in 2003 and 69 percent in 2000.
“It is low-wage workers who are being hurt the most by the steady drip, drip, drip of coverage draining out of the employer-based health insurance system,” said Kaiser Family Foundation President and CEO Drew E. Altman, Ph.D.
In 2005, the “preferred provider organization” (PPO) plans—like that offered by the SIU—were more common than ever, with 61 percent of all employees with health coverage enrolling in a PPO (up from 55% the previous year). In a PPO, there is a network of doctors, hospitals and other health professionals who have agreed to provide care for a set price. The other popular arrangement is the “health maintenance organization” (HMO), which showed a decline in enrollment this year.
Family coverage under a PPO costs an average of $11,090 of which the employer pays $8,449 and the worker pays $2,641 (just to carry the coverage).
Employers predict an increase of about 10 percent next year in their health care costs. Some of these firms will likely ask their workers to pay more in premiums, raise deductibles, raise office visit co-payments or raise prescription drug co-payments. Only about 1 percent of firms say they are “very likely” to drop health coverage entirely in the near future.
The United Auto Workers (UAW), for example, last month said its leadership had unanimously endorsed a deal with General Motors Corp. (GM) to reduce its health care costs by cutting benefits for UAW workers and pensioners. The proposal would mean that health care would no longer be free for many of GM’s retirees and their families and that drug co-payments would be increased for active GM hourly employees.
GM said that the proposed pact with the UAW would reduce its employee health-care expenses by $3 billion annually before taxes. No time frame was given as to when the agreement will be put to union members for ratification.
One outcome of the rising cost of health care is that American workers are beginning to change their attitudes and actions in an effort to cope with the increased co-pays and deductibles. According to the Employee Benefit Research Institute’s 2005 Health Confidence Survey, 79 percent of those persons questioned said they are now choosing generic drugs over name brands, and 71 percent said they are taking better care of themselves.
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