Premium prices growing faster than paychecks, report says

For Massachusetts families, health insurance premiums are growing faster than their paychecks while their coverage gets thinner, a report issued today says.

The findings, based on federal census, labor, and healthcare data, coincide with a Boston Globe-Blue Cross Blue Shield of Massachusetts Foundation poll released today that says even though more Bay State residents have health insurance than others across the country, a significant portion still have trouble paying their medical bills.

Families USA, a Washington healthcare advocacy group, found that in Massachusetts, family healthcare premiums rose 6.7 times faster than median earnings for individual workers from 2000 through 2007. At the same time employers are asking workers to share more of the coverage costs through co-payments or deductibles for hospital care and prescription drugs, sometimes eliminating some benefits completely.

The average annual family health plan premium went up from $7,341 to $13,040, or 77.6 percent. Of that increase, the employer’s portion went up by $3,899 and the worker’s portion grew by $1,800. For individuals, the average annual premium rose from $2,719 to $4,719. The employer paid $1,465 more and the worker paid $1,071 for the individual coverage.

Wage growth did not keep up with the premium price increases, the report says. Over the eight year-period, the median earnings of a Massachusetts worker increased from $30,964 to $34, 542, or 11.6 percent. “Real” earnings, adjusted for inflation, actually declined, the report says.

Nationwide, premiums rose 78.3 percent while earnings rose 14.5 percent. That means premiums increased 5.4 times faster than wages.

“In Massachusetts, health insurance premiums are rising considerably faster than workers earnings,” the report says. “As a result, healthcare costs are consuming ever-larger portions of family budgets and causing substantial hardships.”