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Health premiums rise 7.7%

Rate of hike slows but still outpaces wages, inflation

WASHINGTON -- Increases in health insurance premiums for working families slowed for the third straight year in 2006, but still rose at a rate more than double that of inflation and growth in workers' pay, an annual nationwide survey by the Kaiser Family Foundation shows.

Premiums for workers rose 7.7 percent this year -- the least since 2000 -- down from 9.2 percent in 2005 and just over half the recent peak of 13.9 percent in 2003, according to the survey, which queried more than 3,000 companies with three or more workers. At the end of April, when the survey was completed, wages had increased 3.8 percent from a year earlier and the rate of inflation had increased 3.5 percent, the survey said.

``Nobody's celebrating, and nobody should be celebrating," said Drew Altman, head of the foundation, which studies health care issues. ``A modest reduction in an already high rate of increase hardly looks like salvation to working people and businesses, who have been getting hammered by high health care costs year after year."

Since 2000, workers' health insurance premiums have risen a total of 84 percent, while their wages have increased 20 percent and inflation has risen 18 percent, according to the study, which was conducted in collaboration with the Health Research and Educational Trust, a nonprofit research affiliate of the American Hospital Association. Kaiser and HRET have collaborated on the study since 1999.

Annual insurance premiums for health care coverage for a family of four averages $11,480 this year, with workers paying $2,973 of that amount, $1,354 more than six years ago, the study found. For individuals, premiums average $4,242, with the employee having to pay $627.

About 61 percent of companies surveyed offer health care coverage to at least some employees, about the same as last year. And workers at bigger companies continued to fare better: The study found that while nearly all companies with 200 or more workers offered coverage, fewer than half the smallest companies surveyed did .

Employees with coverage at companies with up to 199 workers tend to pay more out of pocket for premiums -- $3,550 on average for family coverage -- than workers at larger firms, who pay $2,658 on average .

Health care has been a trouble spot for US companies and workers for two decades as escalating costs have forced many firms to choose between layoffs or cuts in benefits to stay competitive.

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