Washington Post Examines Effect Of Increased Health Care Costs On Employee Wages, Benefits

Main Category: Health Insurance / Medical Insurance
Article Date: 26 Mar 2008 - 7:00 PDT

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The issue of increased health care costs, which "has long been a concern," is "re-emerging as an economic and political issue in part because of the role they play in the stubborn problem of stagnating wages," the Washington Post reports. According to the Post, the "struggle to control health costs" is "viewed as crucial to improving wages and living standards for working Americans."

Median family income, after adjustment for inflation, has decreased by 2.6%, or almost $1,000 annually, according to the Post. Meanwhile, premiums for employer-sponsored health insurance have increased by 78% since 2001, according to an annual survey by the Kaiser Family Foundation and Health Research and Educational Trust. In addition, since 2000, health and other benefits have increased from 27.4% to 30.2% of compensation costs for employers, according to the Department of Labor. For some employers, "the choice is coming down to one between better benefits and better wages for workers," the Post reports.

Many employers, who cite health care costs "among their major concerns," have begun wellness programs that encourage employees to exercise, adhere to healthy diets and quit smoking to improve their health and reduce costs. In addition, some employers have begun to ask health insurers to provide more detailed information about their operations.

Meanwhile, Democratic presidential candidates Sens. Hillary Rodham Clinton (N.Y.) and Barack Obama (Ill.) have proposed a requirement that most employers offer health insurance to employees or contribute a percentage of their payrolls into a federal fund to provide coverage. Presumptive Republican nominee Sen. John McCain (Ariz.) has proposed taxing the value of employer-sponsored health insurance as income and instead providing a $5,000 per family tax credit to subsidize the purchase of private health insurance, as well as "free-market proposals aimed at stoking competition and giving patients more information," the Post reports (Fletcher, Washington Post, 3/24).

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