published Friday, September 18th, 2009

Health costs rise more than wages


by Emily Bregel
Audio clip

Ron Pollack

Health insurance premiums rose more than six times faster than worker earnings in Tennessee and Georgia during the past decade, according to a study released Thursday.

Workers in both states suffered from a bigger gap between wages and premiums than most of the rest of the nation, the study showed.

A nonprofit group pushing for health care reform -- Families USA -- said premiums for family health care plans nearly doubled from 2000 to 2009 even while benefits were cut and deductibles and co-payments for employees were increased.

In the same period, median earnings increased only 15.9 percent in Tennessee and Georgia.

"Rising health care costs threaten the financial well-being of families across the country," said Ron Pollack, executive director of the Washington, D.C.-based Families USA. "If health reform does not happen soon, more and more families will be priced out of the market."

In Tennessee, the average annual health insurance premium for both employers and workers covered by family plans jumped from $6,550 in 2000 to $13,077 this year. Employees picked up a growing share of that cost, ranging from an annual average of $973 for individual coverage up to $3,583 for family coverage in Tennessee.

In comparison, median earnings of Tennessee's workers rose from $22,863 in 2000 to $26,506 in 2009.

A recent study from the Commonwealth Fund found that, on average, family insurance premiums in Tennessee are 20.3 percent of the average household income, a proportion that is higher than all other states except West Virginia.

In Georgia, family health care premiums rose from $6,637 in 2000 to $12,394 this year. Median income increased from $25,525 in 2000 to $29,000 this year in Georgia.

Ed Adams, president of EBS Benefit Consulting in Chattanooga, said most of his clients continue to face double-digit rate increases for their health care plans.

"Most employers have already made changes in their plans to raise deductibles, create Health Savings Accounts and require more co-pays from their workers," Mr. Adams said. "But the costs keep going up."

Small businesses, with smaller group insurance pools and little leverage to negotiate with insurers, fare the worst in terms of rates, said Joanne Denise, employee benefit specialist with Strategic Employee Benefit Services in Chattanooga.

"It only takes one diabetic in a group of eight or nine and, all of a sudden, everybody's rates are astronomical," she said.

Tennesseans rank fourth-worst in the nation in terms of obese adults, who often have higher medical costs, pushing up premium rates, brokers say. High prescription drug use and other health problems such as heart disease also are characteristic of the Volunteer State.

"That drives health care costs more than anything else. It's just utilization, because we as a state are unhealthy," said Russ Blakely, insurance agent in Chattanooga.

BY THE NUMBERS

* 99.6 -- Percentage increase in average family health care premiums from 2000 to 2009 in Tennessee

* 86.7 -- Percentage increase in average family health care premiums from 2000 to 2009 in Georgia

* 15.9 -- Percentage increase in median earnings from 2000 to 2009 in Tennessee and Georgia

Source: Families USA, U.S. Bureau of Census

about Emily Bregel...

Health care reporter Emily Bregel has worked at the Chattanooga Times Free Press since July 2006. She previously covered banking and wrote for the Life section. Emily, a native of Baltimore, Md., earned a bachelor’s degree in American Studies from Columbia University. She received a first-place award for feature writing from the East Tennessee Society of Professional Journalists’ Golden Press Card Contest for a 2009 article about a boy with a congenital heart defect. She ...

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librul said...

Sooooo we should oppose healthcare reform??????????????

September 18, 2009 at 1:25 p.m.
southbelle said...

This is only the second time in the last 10 years that I have truly had to use my insurance benefits. While I am going to be paying on a hospital bill for a few months, it is much better than losing everything due to a medical crisis. Yes, my portion of the cost has risen but I will gladly pay that and not worry about losing everything if something should happen to my health. Yes, there is a need for health care reform but be very careful what you wish for. The government has already shown that they are not capable of handling the complex issues dealing with all the different aspects of health care. And while it is unfortunate that not all are eligible for coverage, there is no logical way to make it available (financially or logistically) for every single person in the US.

September 18, 2009 at 2:20 p.m.
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