Cost of Insurance Outpacing Income, Study Finds

Americans who get health insurance for their families through their jobs have seen their premiums increase ten times faster than their income in recent years, a new report from the Robert Wood Johnson Foundation finds.

Based on data from the U.S. Census Bureau and the Agency for Healthcare Research and Quality's Medical Expenditure Panel Survey, the report, Squeezed: How Costs for Insuring Families Are Outpacing Income (12 pages, PDF), found that, nationwide, the amount employees pay for family coverage increased nearly 30 percent from 2001 to 2005, while family policyholders' income increased just 3 percent. The report also found that the proportion of insurance premiums workers pay for family coverage remained constant at about 24 percent during that period, while the dollar amount that workers contribute increased by nearly $2,500.

According to the report, which was released to coincide with Cover the Uninsured Week, the number of private-sector employers nationwide who offered health insurance benefits to their employees fell by 30,000 from 2001 to 2005, with 4.1 million fewer people working for such employers. Meanwhile, the number of Americans with private health insurance fell nearly 2.4 million — or 6 percent — during the same period. According to the latest Census Bureau data, 47 million Americans do not have any health insurance.

"This study makes plain what every working parent knows — that providing insurance coverage takes a bigger bite from the family budget every year," said RWJF president and CEO Risa Lavizzo-Mourey. "There is a clear connection between the rising cost of health care and the increasing number of uninsured Americans. As costs continue to go up, fewer people can pay their portion of the premium, and fewer employers are able to offer insurance benefits. This research shows that an ever-increasing number of people will join America's uninsured unless our nation's leaders act to reform our healthcare system."

“Cost of Insurance Far Outpaces Income.” Robert Wood Johnson Foundation Press Release 4/29/08.

Primary Subject: Health
Location(s): National

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