Washington, D.C. – Health care premiums rose an estimated 3.8 times faster than earnings for California’s working families from 2000 to 2006, according to a report issued today by the consumer health organization Families USA. In that six-year period, health care premiums rose by 81.4 percent, while median earnings rose by only 21.7 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 California, annual health insurance premiums in the 2000-2006 period rose from $6,227 to $11,298, an increase of $5,071, or 81.4 percent.
• Between 2000 and 2006, the median earnings of California’s workers increased from $25,740 to $31,313, or 21.7 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, copayments, and co-insurance. As a result, California families are paying more but receiving less health care coverage.
The Families USA report concludes that the confluence of higher health costs and stagnant wages is causing a growing number of California families to join the ranks of the uninsured and underinsured. The number of non-elderly uninsured people in California is nearly 6,744,000, approximately 21.1 percent of the non-elderly population.
“California 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, Californians 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 California, the employer’s portion of annual premiums in the 2000-2006 period rose from $4,683 to $8,428, an increase of 80.0 percent.
• For family health coverage, the worker’s portion of annual premiums rose from $1,544 to $2,870, an increase of 85.8 percent.
• For individual health coverage, the employer’s portion of annual premiums rose from $2,013 to $3,513, an increase of 74.5 percent.
• For individual health coverage, the worker’s portion of annual premiums rose from $352 to $654, an increase of 85.7 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 Californians will become uninsured and underinsured,” said Pollack. “If earnings continue to lag behind fast-rising health care costs, Californians 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.
