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Secretary Sebelius Releases New Report: Hidden Costs of Health Care

Out-of-Pocket Expenses for Americans with Employer-Based Coverage Rise to More Than $3,700 per Year

 

U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius today released a new report - Hidden Costs of Health Care: Why Americans are Paying More but Getting Less. The report documents the rising cost of deductibles, co-payments and out-of-pocket expenses that are making it more difficult for families with insurance to receive the health care they need, and is available at www.HealthReform.gov.

 

"It doesn't matter if you have insurance or not: when Americans go to the hospital or the doctor's office, they are paying more and getting less," said Sebelius. "Every year, co-pays, deductibles and other expenses are taking a bigger bite out of the family budget and the American people are demanding reform."

 

The report notes:

  • A person with employer-based coverage paid an average of $1,522 on health care (not including premiums) in 2006, compared with $1,260 in 2001.   When including the added burden of higher premiums, out-of-pocket costs rose even more sharply, with a 30 percent increase from an average of $2,827 in 2001 to $3,744 in 2006.
  • Employer-sponsored health insurance premiums have nearly doubled since 2000, a rate three times faster than wages.  In 2008, the average premium for a family plan purchased through an employer was $12,680, nearly the annual earnings of a full-time minimum wage job. 
  • For preferred provider organization (PPO) plans purchased through an employer, the average family deductible increased 30 percent in just two years, from $1,034 to $1,344.  This effect is more pronounced for small firms, where PPO deductibles increased from $1,439 to $2,367 - a rise of 64 percent.
  • In 2004, only one in five people with health insurance through an employer had a co-payment of more than $25, but by 2008 the number jumped to one in three.

 

"Millions of Americans don't have insurance, and millions more are still struggling to afford the care they need," added Sebelius. "We need to pass health reform this year to give these families the relief they need."

 

Today's report is one of a series of reports on the health care status quo that are available online at http://www.healthreform.gov/reports/index.html.

 

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