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No Comments [ Add Comment ]Healthy increases / Utahns' wages not keeping up with rising insurance coverage costs
By JESSE FRUHWIRTHFARMINGTON -- Clearfield resident Audrey Vinson is one of millions of Americans who has seen her health insurance costs nearly triple in recent years.
"The year I started, 2002, for the whole family, it was $98 per paycheck, then up to $190 per paycheck. Then last year, it went to $270 per paycheck," she said.
During the same time, Vinson advanced from cashier to pharmacy technician, so her wages increased from $7.50 per hour to $11 per hour.
That means her cost of health care increased 3.8 times faster than her wages.
Vinson has carried the health insurance for her family for years. Her plan covers herself and her husband, as well as their two children. Her 3-month-old grandson currently has no coverage.
The cost is almost too much to bear, Vinson said, and her entire family may soon have to go without health insurance.
According to Families USA, a nonpartisan advocacy group devoted to gaining health care for all Americans, Vinson's situation is typical.
The average Utahn's work-based health insurance premium has increased five times faster than the average wage since 2000, the group says.
This week, Families USA released 51 reports -- one for each state and Washington, D.C. -- in which it compared the average wage in that state between 2000 and 2007 and how those increases compare to the increase in health care premiums paid by workers.
The trend is harming the nation's work force, said Executive Director Ron Pollack, who adds, "Workers are experiencing a triple whammy.
"First, premium costs are skyrocketing. Second, the portion of the premium paid by workers is increasing even faster than the portion paid by employers. Third, because the employer's portion is increasing very substantially, it means they have less of an ability to provide higher wages," he said.
"All of those things result in harm to workers."
The trend is not regional, Pollack said, adding that states that fared better or worse than average are scattered throughout the U.S.
Worst off were Michigan workers, whose insurance premiums rose a startling 17.5 times faster than wages. On the other end was Nevada, which saw premiums rise 2.5 times faster than wages.
Utah was ranked 25th and mirrored the national average of premiums increasing about five times faster than wages.
According to the Utah "Premiums Versus Paychecks" report prepared by Families USA, the average Utah worker with family coverage saw a 92 percent increase in premium costs between 2000 and 2007.
Employers in the state similarly saw an increase of 82.5 percent in the amount they contributed to workers' family plans.
In 2000, the average family plan in Utah cost $6,305 per year, but it had risen to $11,644 by 2007.
Utahns without families fared better, but their increases in premiums also outpaced wages. Single employees' premiums increased 60 percent, while their employers kicked in another 51 percent for their plans.
In comparison, an average wage increase for all workers in the state was just 17.2 percent in seven years.
The Families USA report also notes that it used raw numbers for wages and did not account for the impact of inflation.
Once wages are adjusted for inflation, the Families USA reports state, real earnings by workers decreased 7 percent between 2000 and 2006, meaning workers faced dramatically increased health care costs even as their spending power decreased.
Pollack said early retirees not yet eligible for Medicare, as well as young workers, are affected most severely by the trend.
"Early retirees who left the job with the assumption they would continue to get health coverage are increasingly finding that employers are reneging on those promises," he said.
"Because (young workers) tend to be in entry-level jobs, they receive lower wages and are less likely to get fringe benefits like health care.
"As these premiums escalate, many of them need to go to the individual (insurance) market because maybe they're in a job that doesn't have health care coverage or they simply can't afford the premiums that are rising so quickly relative to low income."
Pollack said premiums often mirror increases in actual health care costs, so the insurance companies should not be made scapegoats.
He said, however, that insurance companies are charging more for less.
"What is so surprising about these numbers is, these premiums purchased thinner coverage," Pollack said. "They provide fewer benefits that come with higher deductibles and higher co-payments."
Pollack said his group endorses no single reform to alleviate the problem but urges both presidential candidates and the future Congress to make health care the top priority in 2009.
On paper, Vinson faired better than the average American.
She's not a young worker, not an early retiree and her insurance premiums increased only 3.8 times faster than her wages, better than the average Utahn.
That's little solace, however. She was injured recently, may require surgery, may lose her job if she does not return from medical leave soon, and is uncertain whether she can pay for her co-pays and deductibles.
"We're trying to apply for Medicaid right now," she said at Midtown Community Health Center, a publicly subsidized clinic in Farmington where her 3-month-old grandson had an appointment.
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