Cost of Alaska Health Insurance Policies Increases Six Times Faster Than Wages
1 October 2008
Image by Steve Rhodes via Flickr
New Study By FamiliesUSA Jointly Released with Alaska Center for Public Policy
A new study by FamiliesUSA released today shows that over the past eight years (2000 through 2007), family health insurance premiums
for Alaska’s workers rose 5.7 times more quickly than average earnings. On average, health care premiums for families rose by 73.6 percent, while average earnings rose by only 13.0 percent.
For family health coverage in Alaska, the average annual premium (employer and worker share of premiums combined) rose from $7,456 to $12,942, an increase of $5,486. For family health coverage in the state, the employer’s portion of annual premiums rose from $5,484 to $9,901 (a difference of $4,416), while the worker’s portion rose from $1,972 to $3,041 (a difference of $1,069).
Lose Your Job, Then Lose Your Health Insurance
In addition to higher premiums, Alaskan working families faced higher out-of-pocket health care costs, such as deductibles, copayments, and costs for services that were not covered by their insurance plans. As a result, health care costs are absorbing an ever-larger portion of family budgets.
Here in Alaska as elsewhere in the Lower-48, the proliferation of “high deductible” and “catastrophic” health insurance plans is making a bad situation much worse. You have seen what subprime loans have done to the housing industry. Now we are regularly being sold subprime health insurance policies.
Illness, high medical costs, and the resulting financial insecurity form a vicious cycle. Illness drives increases in medical costs that, in turn, lead to financial difficulties. Concurrently, workers facing illness are often forced to reduce the hours they work and may lose their jobs completely, and then their health insurance. Faced with the loss of insurance, Alaskan families with mounting medical debt are drawn deeper into financial turmoil.
What to do? We really want affordable access to quality health care. For-profit health insurance is a mechanism that is wastefully expensive, bureaucratic, and unnecessary. We can make real headway right now by directly funding the system of approximately 125 non-profit Community Health Centers that already exist across the state, and that are already straining their resources to see all the uninsured, low-income working families, and medicare patients who cannot otherwise find a family practice physician to see them.
We can also greatly increase the number of children and pregnant women that do not have access to affordable, regular health care by doubling the allowable income for eligibility to 350%, or even higher, which would still be in line with many other states. This is an extraordinarily inexpensive way for the state to help provide health care to those who need it because the federal government picks up half or more of all the costs.
A complete copy of the report Premiums versus Paychecks: A Growing Burden for Alaska’s Worker is available online.
