Health Insurance Cost

Among national concerns, the rate of health care and health insurance cost should be near the top of our priority lists. By more than one measure, health care and health insurance cost and spending continue to rise at the fastest rate in our history. Here’s a few figures to digest.

In 2007, total national health expenditures were expected to go up to 6.9%, two times the rate of inflation. Total spending was $2.3 trillion for the same year, or $7600 per person. Total health care spending and health insurance cost ended up representing 16% of the gross domestic product. And it is expected that US health care and health insurance cost and spending will increase at similar levels for the next decade. By 2016, we’re looking at $4.2 trillion, which is at least 20% of the gross domestic product.

Health care experts agree the system is rife with inefficiencies, excessive administrative expenses, inflated prices, poor management, inappropriate care, waste, and fraud. All of this affects health care and health insurance cost and spending for employers and workers and that affects the security of their families.

All of which is outrageous. Health care spending is 4.3 times the amount spent on national defense, yet nearly 47 million Americans are uninsured. And still the United States spends more on health care than other industrialized nations, but those other countries provide health insurance for all their citizens.

The effects on employer and employee health insurance cost are quite noticeable.

Premiums for employer-based health insurance rose by 6.1% in 2007 and small employers saw their premiums, on average, increase 5.5 %. Firms with less than 24 workers experience an increase of 6.8%. The annual premium that health insurance cost insurer charges an employer for a health plan covering a family of our averaged $12,100 in 2007 while workers contributed nearly $3,300, or 10%, more than they did a year ago. Annual premiums for family coverage eclipsed the gross earnings for a full-time, minimum-wage worker, which was $10,712.

Workers are now paying $1,400 more in health insurance cost for premiums yearly for family coverage than they did in 2000. Since then, employment-based health insurance premiums have increased 100%, compared to cumulative inflation of 24% and cumulative wage growth of 21% during the same period.

In fact, health insurance costs are the fastest growing cost component for employers and, unless something changes, will overtake profits sometime this year. The average employee contribution to company provided health insurance has increased more than 143% since 2000. Average out of pocket expenses for deductibles, co-payments for medications, and co-insurance for physician and hospital visits rose 115% during that same time period.

And there was a 16% increase in health insurance cost for Americans under 65 whose family-level, out of pocket spending for health care exceeds $2000 a year.

Obviously, low cost health insurance or some other measure should be done to get health care and health insurance cost under control. These figures are ridiculous and the government should have done something about them long ago. Hopefully, things won’t get too much worse before they become better.