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Employers' health costs still zooming, just not as quickly.

Employer-sponsored health insurance premiums once again grew by a declining rate in 2007, but continued to outpace both wages and general inflation, a new study published in the journal Health Affairs concludes.

According to the 2007 Employer Health Benefits Survey, sponsored annually by the Kaiser Family Foundation and Health Research and Educational Trust, the average annual premium for family coverage under an employer-sponsored policy is $12,106 this year, with a typical worker contribution of $3,281 toward the premium.

For firms with fewer than 200 employees, workers contributed $4,236 on average for family coverage, compared with $2,831 for employees of larger firms. For single coverage, average employee contributions were actually greater at large firms, averaging $759, than at smaller firms, where they averaged $561. In a statement, Kaiser President Drew E. Altman said the amount employees contribute for family policy premiums has increased roughly $1,500 over the past six years.

Health premiums rose an average 6.1%, compared with 7.7% in 2006. It was the fourth consecutive year the survey found a declining rate of increase, and marked the slowest premium growth since the 5.3% increase in 1999.

Kaiser said the 2007 increase more than doubled the 2.6% overall inflation rate and the 3.7% growth in workers' wages. The survey said premiums have risen 78% since 2001, while wages have risen 19% and inflation has grown just 17%.

America's Health Insurance Plans, the trade group for the health insurance industry, saw the moderation trend as a silver lining that demonstrates the industry's focus on containing costs. It cited a study by PricewaterhouseCoopers that said tiered prescription drug formularies are instrumental in controlling drug costs.

According to 2007 statistics compiled by the U.S. Census Bureau, the percentage of Americans covered by employment-based health insurance fell from 60.2% in 2005 to 59.7% in 2006. The number of Americans without health insurance coverage rose to a record 47 million in 2006.
Going Up

Average annual firm and worker premium contributions
for covered workers for single and family coverage,
by plan type, 2007

 Worker Contribution Firm Contribution

HMO Single $711 $3,588
 Family $3,311 $8,568

PPO Single $717 $3,290
 Family $3,236 $9,207

POS Single $628 $3,709
 Family $3,659 $7,929

HDHP/ Single $522 $3,347
SO Family $2,856 $7,837

ALL Single $694 $3,785
PLANS Family $3,281 $8,824

Note: Table made from bar graph.

Cost of Health Care

Average annual worker premium contributions and
total premiums for covered workers, single and
family coverage, by firm size, 2007

 All Small Firms All Large Firms
 (3-199 Workers) (200+ Workers)

Single Coverage

Premium $4,553 $4,442

Worker
Contribution * $561 $759

Family Coverage

Premium $11,835 $12,233

Worker
Contribution * $4,236 $2,831

* Estimates are statistically different between All Small
Firms and All Large Firms (p<.05).

Source: Kaiser/HRET Survey of Employer-Sponsored Health
Benefits, 2007.

Note: Table made from bar graph.
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Title Annotation:Briefing
Author:Lehmann, R.J.
Publication:Best's Review
Date:Oct 1, 2007
Words:498
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