The growth in healthcare costs decreased for the second year in a row in 2005, and increased by a single digit percentage for the first time since the year 2000, according to the 2005 Annual Employer Health Benefits Survey.
Released Sept. 14 by the Kaiser Family Foundation and the Health Research and Educational Trust, the survey also revealed that increasing healthcare costs have led to a smaller percentage of businesses offering health coverage to their employees. According to the survey, 60 percent of firms offered healthcare coverage to their employees in 2005, down from 69 percent in the year 2000. That decrease, according to the survey, represents 266,000 fewer firms offering coverage. The vast majority of the decrease was experienced by smaller firms, with nearly all larger firms of 200 employees or more offering healthcare coverage.
“It is the low-wage workers who are being hurt most by the steady drip, drip, drip of coverage draining out of the employer based health insurance system,” said Drew Altman, president of the Kaiser Family Foundation.
Although Mr. Altman welcomed the slowed growth of healthcare costs, at 9.2 percent in 2005 down from 11.2 percent in 2004 and 13.9 percent the year before, as good news. “The bad news,” he added, “is that that is the only good news.” Overall, health care costs continue to grow more than two and a half times the rate of inflation, which is 3.5 percent and more than three times the growth in workers’ wages, which is 2.7 percent.
Additionally, the survey found that annual premiums for family coverage in 2005, at $10,880, have surpassed the gross earnings of a full-time worker making the minimum wage, which would be $10,712. The percentage of premium paid by workers, 26 percent for 2005, has remained relatively stable, but the amount of actual money paid by workers has increased by $1, 094 for family coverage since the year 2000.