Insurance costs rising much faster than wages

Health insurance premiums for South Carolina families rose 5.7 times faster than earnings between 2000 and 2007, according to a report released Thursday.

Annual premiums for family health coverage provided through the workplace rose from $6,600 to $11,624, an increase of 76.1 percent. Meanwhile, median earnings increased from $23,057 to $26,140, or 13.4 percent.

Ron Pollack, executive director of Families USA, a national nonpartisan group based in Washington, D.C., said, "What is so surprising about these numbers is that these premiums purchased thinner coverage."

People are getting higher co-pays, higher deductibles and caps on coverages, said Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center.

Pollack described the situation as a triple whammy.

Premiums are skyrocketing, and the portion workers pay is increasing faster than their employers' portion, he said. Add to that stagnant wages.

Although the employees' portion is increasing more than 8 percent faster, employers pay a much larger share of the growing premiums, cutting into resources to pay for salaries. "It has a depressing affect on wages," he said.

The lowest rate was in Nevada, where insurance premiums rose 2.5 times faster than the median wage.

Michigan had the highest multiple; premiums there rose of 17.1 times as fast as wages.

"People who used to take their health insurance for granted are at high risk of becoming uninsured," Pollack said.

Ken Trogdon, chief executive officer for the South Carolina nonprofit Welvista, has seen a significant increase in the number of applicants for the program that provides prescriptions to uninsured residents who meet certain income requirements.

In 2007, 142,000 prescriptions for uninsured people with chronic conditions such as asthma, hypertension and diabetes were filled with drugs donated by pharmaceutical companies.

"Folks out there that are struggling, who fall through the cracks, end up in the emergency room," Trogdon said.

Medical costs contribute to more than half of bankruptcies, the report stated.

In the two years before they filed for bankruptcy, 40 percent of working families gave up phone service. One-fifth of the families went without food. And more than half went without medical or dental care because of the cost, according to the report.

A number of solutions to the crisis have been floated, Pollack said, including allowing Medicare to bargain for cheaper prescription drug prices.

"A lot can be done, but we haven't had the national leadership to get them done," Pollack said.

On the state level, Berkowitz is worried about the future of Medicaid, which matches state money with federal funds, and the State Children's Health Insurance Program, or SCHIP, which increased its coverage this year.

"We need to be careful of not cutting away at Medicaid without looking at the long-term effects on what it does to citizens," she said.

Reach Jill Coley at 937-5719 or jcoley@postandcourier.com.