Alaska Health Care Premiums Rose 5.3 Times Faster Than Earnings 2000-2009
Alaska-specific report finds that premiums rose by 90.8 percent, while earnings rose by only 17.3 percent.
ANCHORAGE, Alaska - Family health care premiums rose an estimated 5.3 times faster than earnings for Alaska's workers from 2000 through 2009, according to a report issued September 15 by the consumer health organization Families USA and co-released with the Alaska Center for Public Policy. In that 10-year period, family health insurance premiums rose by 90.8 percent, while median earnings rose by only 17.3 percent.
Among the new report's key findings are:
*For family health coverage provided through the workplace in Alaska, the average annual health insurance premium (employer and worker share of premiums combined) in the 2000-2009 period rose from $7,456 to $14,226-an increase of $6,770, or 90.8 percent.
*Between 2000 and 2009, the median earnings of Alaska's workers rose from $27,373 to $32,103-an increase of $4,730, or 17.3 percent.
As the report notes, the disproportionately high increases in insurance premiums have continued despite employees receiving "thinner coverage"-coverage that offers fewer benefits and/or that comes with higher deductibles, copayments, and co-insurance. Other employers have cut costs by placing limits on which employees are eligible for coverage or by eliminating coverage for spouses and children of employees. As a result, Alaska families are paying more but receiving less in health coverage.
"The health insurance industry is probably the least regulated financial industry in the nation," said Lawrence D. Weiss PhD, Executive Director of Alaska Center for Public Policy. "This industry sells phenomenally expensive "subprime" policies that are often too expensive to be used, and there is no accountability for their actions."
"Rising health care costs threaten the financial well-being of families in Alaska and across the nation," said Ron Pollack, Executive Director of Families USA. "If health care reform does not happen soon, more and more families will be priced out of the health coverage they used to take for granted."
An even worse downside of rising costs is the loss of health coverage altogether. Between 2000 and 2008, the total percentage of U.S. firms offering health coverage declined by 6 percentage points-from 69 percent of firms to 63 percent-with small businesses being the most likely to drop coverage.
Rising Health Care Premium Costs
Another potential catastrophe for families is the possibility that they will join the growing ranks of families filing for bankruptcy because of their medical debts. Prior to filing for bankruptcy, families attempt to balance budgets by dropping phone service, trimming food costs, and going without needed medical or dental care. Despite these desperate measures, however, more than half of all bankruptcies are related to medical costs.
Key findings in the report make clear how the burden of rising health care costs is being shared by employers and employees for both family health coverage and individual coverage. Among those findings:
*For family health coverage in Alaska the employer's portion of annual premiums in the 2000-2009 period rose from $5,484 to $10,769-an increase of $5,285, or 96.4 percent.
*For family health coverage, the worker's portion of annual premiums rose from $1,972 to $3,547-an increase of $1,485, or 75.3 percent.
*For individual health coverage, the employer's portion of annual premiums rose from $2,552 to $4,760 -an increase of $2,208, or 86.5 percent.
*For individual health coverage, the worker's portion of annual premiums rose from $371 to $866-an increase of $495, or 133.5 percent.
"For America's businesses and families, the absence of health care reform is unaffordable and unacceptable," said Pollack. "It will mean that businesses have a harder time staying competitive, and more and more families have to cope with stagnant wages and the loss of affordable health coverage."
Pollack cited four of the many causes of skyrocketing health care premiums: wasteful health care spending, an almost-unregulated insurance market, a dramatic drop in competition in the insurance market, and cost shifts from the uninsured, termed a "hidden health tax."
"All of these issues can be addressed in a comprehensive reform of our health care system that will allow businesses and families to afford quality health coverage," Pollack said.
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.
A copy of this report is available online at http://www.familiesusa.org/assets/pdfs/costly-coverage/alaska.pdf
About Alaska Center for Public Policy
ACPP is a nonprofit, independent, nonpartisan think tank devoted to the advancement of public policy that benefits low- and medium-income families in Alaska. http://acpp.info
About Families USA
Families USA is the national organization for health care consumers. It is a nonprofit, nonpartisan organization that advocates for high quality, affordable health care for all Americans. www.familiesusa.org