New Report Shows Health Care is Far Less Affordable

In 35 States, Workers’ Health Care Premiums Rose at Least Three Times Faster

Washington, D.C. – Despite fewer health benefits for working families, health insurance premiums rose much faster than earnings over the last four years, according to a report released today by Families USA, the national nonprofit and nonpartisan organization for health care consumers.

In the following 35 states, according to the report, average premium costs for workers rose at least three times faster than average earnings from 2000 to 2004: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, South Carolina, South Dakota, Texas, Utah, Vermont, West Virginia, Wisconsin, and Wyoming. [See attached chart #1.]

Nationally, workers’ premium costs rose, on average, by 35.9 percent, while their average earnings over the same period rose by only 12.4 percent. These comparatively large premium increases occurred despite erosions in health care coverage, with employer-provided insurance packages covering fewer health services and workers paying more in deductibles and copayments.

“Working families were squeezed by runaway health care costs over the past four years,” said Ron Pollack, Executive Director of Families USA. “As a result, workers are paying much more in premiums but are receiving less health coverage; wages are being depressed; and millions of people have lost health coverage entirely.”

Family health premiums paid by employers and workers rose from $7,028 in 2000 to $9,320 in 2004. The average amount paid by workers for this coverage rose from $1,433 to $1,947 during that period—an increase of 35.9 percent.

And, the number of Americans who had total health costs that consumed more than one-quarter of their earnings rose from 11.6 million in 2000 to 14.3 million in 2004—an increase of almost 23 percent. The overwhelming majority of these people (10.7 million) had health insurance.

“Health care costs and coverage for America’s working families have gotten considerably worse over the past four years,” said Pollack. “It is high time that these growing problems receive priority attention and national leadership.”

The Families USA report also found that many more people are now uninsured. Approximately 85.2 million people were uninsured at some time during the 2003-2004 period, an increase of 12.7 million from 1999-2000, when the number of uninsured stood at 72.5 million.

In 2003-2004, one out of every three Americans under 65 years of age went without health insurance for some period of time. Over half of these people were uninsured for at least nine months.        

“The number of people who were uninsured at some point in 2003-2004 exceeds the combined population of 32 states and the District of Columbia,” said Pollack. “This is an epidemic that requires immediate attention.”

The report was produced with data compiled and analyzed by The Lewin Group from federal government sources, including the Census Bureau, the Department of Labor, and the Department of Health and Human Services. The analysis allowed Families USA to compare data on health costs and coverage in 2000 with projections for 2004.

pdf of report in English l  pdf of report in Spanish

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Families USA is the national organization for health care consumers. It is nonprofit and nonpartisan and advocates for high-quality, affordable health care for all Americans.

1201 New York Avenue NW, Suite 1100 · Washington, DC 20005
202-628-3030 · Email: info@familiesusa.org · www.familiesusa.org