WASHINGTON, D.C. — According to a report from the Dow Jones Newswire, workers and their dependents are more likely to see company-sponsored health-care costs rise and package benefits decrease this year — a trend that will only worsen in coming years, according to a survey by nonprofit organizations released Thursday.
The premiums that companies and employees paid for health-care coverage are 12.7 percent higher this year than last, according to the survey by the Kaiser Family Foundation and the Health Research and Educational Trust.
The percentage increase was higher than any year since 1990, according to the survey. Premiums rose 11 percent in 2001 and 8.3 percent in 2000.
At the same time, the number of small businesses that offered health plans dropped to 61 percent in 2001 from 67 percent in 2000. Additionally, the number of companies that decreased benefits jumped higher than the number of firms that improved packages.
Myriad factors are driving up health care costs, said Leslie Galloway, an employee benefits consultant for Gordon Zucarelli & Handley Business Services Inc. in Tucson. The company – a Century Business Services Inc. entity – negotiates and services contracts between health-plan carriers and employers in Tucson.
Expensive prescription drugs, improved medical technology and increased access to both are factors that have increased health-care costs, Galloway said.
The Kaiser and health trust report is based on interviews with 2,327 companies conducted between January and May. The response rate was 50 percent.
“This year’s survey just saw virtually every measure moving south, with premiums escalating, workers paying more and benefits being cut back,” said Larry Levitt, vice president of the Kaiser Family Foundation, which has conducted the annual survey since 1999.
The average monthly premium in 2002 was about $255 for single coverage and $663 for family coverage. Employers continued to bear the bulk of the burden, but a shift has begun whereby employers have started to place a larger responsibility for the cost in employees’ hands.
The average worker’s monthly contribution for single coverage rose to $38 from $30 last year, while contributions for family coverage jumped to $174 from $150 a month.
The cost of deductibles and co-payments also soared in 2002, factors that the report on the survey attributed to the slowing economy.
Rising premiums, on the other hand, were blamed on bloating medical expense claims.
Employer-sponsored health care remains the primary source of coverage among Americans. Nearly two out of every three Americans rely on company-sponsored health plans, the survey said.
But with increases in the cost of health care rising to double-digit numbers in recent years, and with the economy faltering, fears have grown that the system is in serious trouble, and that employees are less able to pay for the rising costs.
“There’s very little prospect that things are going to get better any time soon,” Levitt said.