Incomes not Keeping Up with Health Premiums

April 29, 2008 ( - Premiums for Americans who get health insurance for their families through work have increased 10 times faster than their income in recent years, according to an analysis released by the Robert Wood Johnson foundation.

A news release said the study found that nationwide, the amount employees pay for family coverage increased 30% from 2001 to 2005, while their income increased just 3% over the same period. The percentage of premiums employees pay for family coverage has been relatively flat, but the dollar amount this percentage equates to has increased since the average cost of family coverage increased from $8,281 in 2001 to $10,728 in 2005.

While the amount that workers pay for family premiums, on average, increased $664, from $1,921 in 2001 to $2,585 in 2005, the median income of people who hold family health insurance policies increased just $1,250 during the same period, from $40,818 in 2001 to $42,068 in 2005.

Other findings of the analysis, according to the release, included:

  • Fewer employees are working in private-sector jobs that offer insurance – Nationally, 4.1 million fewer people worked in private-sector jobs that offered health insurance in 2005 than in 2001.
  • Fewer private-sector businesses offer coverage – The number of private-sector employers nationwide who offered health insurance benefits to their employees fell by 30,000 from 2001 to 2005.
  • Employer share of health insurance premium costs has increased also – The average cost that employers pay for their share of family coverage increased from $6,360 to $8,143, or 28%, from 2001 to 2005.
  • Fewer people have private health insurance coverage – Americans with private health insurance fell nearly 2.4 million, or 6%, from 2001 to 2005.
  • More people are uninsured – According to the latest Census figures, 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 Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation, in the press release. “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.”

The analysis was compiled by researchers at the State Health Access Data Assistance Center, located at the University of Minnesota. It uses the most recent data from the U.S. Census Bureau (two-year averages for 2001 – 2002 and 2006 – 2007) and the Medical Expenditure Panel Survey, conducted by the Agency for Healthcare Research and Quality (2000, 2001, 2005).

The report is being released during Cover the Uninsured Week (April 27 – May 3), a non-partisan campaign organized by the Robert Wood Johnson Foundation to advocate for health coverage for all Americans. The report is here .