Report: Health insurance premiums outpace earnings for Texas workers

Family health insurance premiums for Texas workers have risen 5.8 times faster than median earnings from 2000 through 2007, according to new study by Families USA. “Over the past eight years, Texas’ working families have seen their health care costs go up faster than their earnings,” the non-profit health care organization wrote in the report. “As a result, the cost of health insurance premiums now imposes a greater burden on family budgets than ever before.”

Annual health insurance premiums for employer-provided family coverage rose from $6,638 to $12,403 between 2000 and 2007 while median wages of Texas workers increased from $23,032 to $26,484 during the same period. This amounts to a 86.8-percent increase in premiums while wages have increased 15 percent.

The share of premium costs paid by workers with employer-sponsored coverage also increased dramatically over the past eight years. In 2000, the average Texas worker paid $1,759 of the premium cost for family coverage. By the end of 2007, that amount had increased by 82.6 percent to $3,212.

As employers struggle to deal with annual increases in premiums, they are faced with difficult decisions. They must absorb the increases by holding down wages, offer plans with fewer benefits, shift more of the premium costs to their employees or eliminate coverage completely. The report states that increases in health costs and their associated increases in insurance premiums lead to a growing trend of employers offering less coverage, moving away from full-coverage plans to partial coverage plans with higher deductibles and more cost-sharing. According to the report, “increases in cost-sharing have a detrimental effect on the health and well-being of workers. A sizeable body of research indicates that increase in cost-sharing reduce access to necessary care.”

Families USA warns that Texas will face diminishing economic and health security unless national policymakers take steps to make health care more affordable and accessible.

To read the report, “Premiums versus Paychecks: A Growing Burden for Texas’s Workers,” go to the Families USA Web site.