Health Care Costs and Your Wallet

The Kaiser Family Foundation recently issued its 2004 report on employer-provided health care.  The report shows that health care costs for employers have increased 59% during the last four years.  During that same period, five million employees have lost employer-provided health care.  

The report shows some sharp differences between employer-provided health care between small employers and larger employers.  Small employers (3-9 employees) are the least likely to provide health care coverage to their employees.  Only 52% of these employers provide health care coverage.  The percentage of employers providing health care coverage increases with the size of the employee population:  10-24 employees (74%); 25-49 employees (87%); 50-199 employees (92%); and 200+ employees (99%).  

Employers who employ fewer than 200 employees provide coverage to about 50% of their employees.  Large employers (200+) cover 68% of their employees.

Employees across the board pay about 16% of the cost of single coverage.  Employees with family coverage pay approximately 28% of the cost of their coverage.  The average contribution of an employee with family coverage is now $2661 per year.  An employee who makes $25000 per year will spend more than 10% of their paycheck on health care costs for his or her family.

The 59% increase in the cost of employer-provided health care during the last four years far exceeds the rate of inflation (9.7%) or the average increase in wages (12.4%) over the same four-year period.  This means that an average employee's entire increase in wages over the last four years has gone to pay his or her share of the cost of employer-provided health care.

If you are interested in seeing more data from the study, go to www.kkf.org.