Report finds health premiums out of control in Pennsylvania

Washington, D.C. - Health care premiums rose an estimated 5.7 times faster than earnings for Pennsylvania’s working families from 2000 to 2006, according to a report issued this week by the consumer health organization, Families USA. In that six-year period, health care premiums rose by 75.6 percent while median earnings rose by only 13.3 percent. The Families USA report is the first of its kind to document these changes on a state-specific basis. Among the key findings in the report are: For family health coverage provided through the workplace in Pennsylvania, annual health insurance premiums in the 2000-2006 period rose from $6,721 to $11,801, an increase of $5,080, or 75.6 percent. Between 2000 and 2006, the median earnings of Pennsylvania’s workers increased from $24,834 to $28,145, or 13.3 percent. According to the report, the disproportionately high increases in insurance premiums occurred despite the provision of “thinner coverage” to workers, coverage that offers fewer benefits and/or that comes with higher deductibles, co-payments, and co-insurance. As a result, Pennsylvania families are paying more but receiving less in health care coverage. The Families USA report concludes that the confluence of higher health costs and stagnant wages is causing a growing number of Pennsylvania families to join the ranks of the uninsured and underinsured. The number of non-elderly uninsured people in Pennsylvania is nearly 1,364,000, approximately 13.0 percent of the non-elderly population. “Pennsylvania families have been hit hard in the pocketbooks due to skyrocketing health costs and stagnant wages,” said Ron Pollack, Executive Director of Families USA. “As a result, Pennsylvanians are paying much larger portions of their paychecks on health care, and health care is becoming less and less affordable.” The key findings in the report provide data concerning premiums for family health coverage as well as individual coverage. They also break out the premium costs paid by employers and those paid by employees. The key findings include: For family health coverage in Pennsylvania, the employer’s portion of annual premiums in the 2000-2006 period rose from $5,424 to $9,394, an increase of 73.2 percent. For family health coverage, the worker’s portion of annual premiums rose from $1,297 to $2,407, an increase of 85.6 percent. For individual health coverage, the employer’s portion of annual premiums rose from $2,094 to $3,473, an increase of 65.8 percent. For individual health coverage, the worker’s portion of annual premiums rose from $373 to $762, an increase of 104.7 percent. According to the report, these fast-rising health care costs are causing increasing numbers of people to go into debt. The report cites a study that found that more than half of bankruptcies are now due, at least in part, to problems with medical costs. “If this troubling trend continues, the health care affordability crisis will get much worse and many more Pennsylvanians will become uninsured and underinsured,” said Pollack. “If earnings continue to lag behind fast-rising health care costs, Pennsylvanians will face diminishing economic and health security. It is high time for national leaders to address this growing problem and make it a top national priority.” The Families USA report is based on data from the U.S. Census Bureau, the U.S. Department of Labor, and the U.S. Department of Health and Human Services. For a copy of the report and to review the methodology, please visit our Web site at http://www.familiesusa.org/resources/pub lications/reports/pa-premiums-vs-paychec ks.html. Families USA is the national organization for health care consumers. It is a nonprofit, nonpartisan organization that advocates for high-quality, affordable health care for all Americans.