Families' health care costs grow faster than earnings

Health care premiums rose five times faster than earnings in California since 2000 - another sign of the spiraling cost of medical insurance as families pay for more for less health coverage, according to a national advocacy group. In the past seven years, family health premiums rose by 95.8 percent, while median earnings rose by 19.3 percent, according to a study released today by Families USA, a national nonpartisan group based in Washington, D.C. In California from 2000 to 2007, annual premiums rose from $6,227 to $12,194. During that same period, the median pay went from $25,740 to $30,702. "Skyrocketing health care costs were a problem in California before the current economic downturn, and slow wage growth or job losses now only make matters worse," said Ron Pollack, executive director of Families USA. "As health care becomes less and less affordable, Californians face difficult choices in trying to provide health coverage for themselves and their families," Pollack said. "A bad situation is clearly growing worse." Michigan, hobbled by troubles in the auto industry, had the nation's worst premiums-earnings ratio -- with premiums rising 17 times faster than earnings, according to the study. Nevada's ratio was about 2.5 times. California was somewhere in the middle, Pollack said. On average nationally, health premiums rose 78 percent, lower than California's rate, during the seven-year period. However, earnings in California outpaced the rest of the country, which saw wages rise by 14.5 percent. About 6.6 million are medically uninsured in California - more than a fifth of the state's population. The Families USA study echoes a Kaiser Family Foundation survey released last month that showed the trend nationally. According to the Kaiser study released last month, the average yearly worker contribution for employees without dependents is now $721, about double from a decade ago. Meanwhile, the average yearly worker contribution for employee with family coverage is $3,354.