Health Insurance Premiums Skyrocket

By contrast, the average income among Americans carrying family policies went up just 3 percent --or about $1,250 -- in the same timeframe.

Employers, meanwhile, have seen their out-of-pocket share per family policy rise 28 percent, to a 2005 average of $8,143. The result: 30,000 fewer employers offered their workers health coverage in 2005 than in 2001, translating into more than 4 million fewer private-sector workers with jobs that offer health benefits.

"We're not trying to point the finger at anybody," said Berman. "Employers are paying more, employees are paying more, and costs are out of control for everybody. So we all need reform, to address costs and also to increase coverage. Because now, one in six Americans are uninsured, which ultimately places a greater burden on all of us."

Mark V. Pauly, a professor of health economics at the Wharton School of Business at the University of Pennsylvania in Philadelphia, said he believes the report paints a very complex problem with too broad a brush.

"The state of health insurance today is a pretty gloomy picture," he said. "Particularly if you're a freelancer or working for a small business. But the phenomenon of health insurance outpacing income or GDP has been going on since the passage of Medicare in 1965. So, it's the same old stuff. And I think this report is waving the bloody shirt to make it look worse recently than it really is."

"One of the major conundrums," explained Pauly, "is that the cost of insurance has increased as health spending has increased, primarily because of the development of new medical technology, especially in terms of drugs, which, as far as we can tell, is an expense worth the money."

"So the accurate story," he said, "is that while the rate of insurance cost growth has actually tailed off quite a bit in the last couple of years, somewhere between 2000 and 2005, insurance premiums went up even higher than usual -- mostly because of increases in the cost of prescription drugs. When prior to that generally prescriptions were not covered. So you can't win by losing, since before that, people had to pay for prescriptions out of pocket.

"The problem therefore is that consumers really want these benefits," Pauly said. "But they have a price tag that makes it especially hard for lower-income people. So, we've got an unsustainable system, and we have to find a better way to make health-care choices. But it's not going to be painless."

More information

For more on health insurance costs, visit the National Coalition on Health Care.

SOURCES: Michael Berman, spokesperson, Robert Woods Johnson Foundation, Princeton, N.J.; Mark V. Pauly, Ph.D., professor, health economics, The Wharton School, University of Pennsylvania, Philadelphia; April 27-May 3, 2008, report, "Cover the Uninsured Week"