Cost of Insurance Far Outpaces Income

Nationwide, the amount employees pay for family coverage increased 30 percent from 2001 to 2005, while family policyholders' income increased just three percent over the same period.

The analysis was conducted by researchers at the University of Minnesota. It shows that the proportion of insurance premiums that workers pay for family coverage has remained constant over the years, but the dollar amount that workers contribute has substantially increased.

Nationally, the average cost of family coverage increased nearly $2,500 - from $8,281 in 2001 to $10,728 in 2005. The percentage of family premiums that employees pay held steady at about 24 percent. The amount that workers pay for family premiums, on average, increased $664, from $1,921 in 2001 to $2,585 in 2005. Meanwhile, the median income of people who hold family health insurance policies increased just $1,250 during the same period, from $40,818 in 2001 to $42,068 in 2005. The average cost that employers pay for their share of family coverage increased from $6,360 to $8,143, or 28 percent, during the period.

"This study makes plain what every working parent knows - that providing insurance coverage takes a bigger bite from the family budget every year," said Risa Lavizzo-Mourey, MD, MBA, president and CEO of the Robert Wood Johnson Foundation. "There is a clear connection between the rising cost of health care and the increasing number of uninsured Americans. As costs continue to go up, fewer people can pay their portion of the premium, and fewer employers are able to offer insurance benefits. This research shows that an ever-increasing number of people will join America's uninsured unless our nation's leaders act to reform our health care system."