Rise in Cost of Employer-Paid Health Insurance Slows

The slowdown is scant consolation for workers. The 6.1 percent rise in health insurance costs in 2007 is higher than growth in wages (3.7 percent) and more than double the inflation rate (2.6 percent), the Kaiser survey found.

Since 2001, premiums for family coverage have gone up 78 percent, while wages have risen 19 percent and consumer prices have increased 17 percent. Over that time, workers' share of premiums for family coverage went up about $1,500 per family, Altman said.

One contributing factor is a cycle of higher profits for health insurance companies, said Gabel, a former research director for two industry trade associations.

"The period 1999 to 2007 has been one of unprecedented profitability," he said, noting that profit margins for major publicly traded carriers have been about 6 percent lately, compared with about 3 percent in the 1980s and 1990s.

Ignagni said the industry average has long been 3 percent to 5 percent.

Other notable findings of the Kaiser survey include:

? The average annual premium for individual coverage under employer-sponsored insurance is $4,479 in 2007, up from $4,242 last year. The employee's share increased to $694, up from $627.

? New "consumer-driven" plans -- high deductible plans paired with tax-free health savings accounts -- enrolled about 5 percent of all covered workers in 2007, or about 3.8 million people. Last year, about 4 percent of covered workers, or 2.7 million people, were in such plans, which have been promoted by the Bush administration.

? On average, employees of small firms (fewer than 200 workers) pay significantly more out of pocket for family coverage than those in larger firms -- $4,236 compared with $2,831. But small-firm employees pay less out of pocket for individual coverage -- $561 compared with $759.

? More than 40 percent of the firms surveyed said they are "very likely" or "somewhat likely" to increase their workers' premium contribution next year and their share of the costs of prescription drugs.