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Average family health policy nears $11,000

By Julie Appleby, USA TODAY Thu Sep 15, 8:47 AM ET

The average cost for a family health insurance policy topped $10,000 for the first time this year, although premium costs rose at their slowest rate since 2000, a closely watched survey of employers released Wednesday shows.  Conducted annually by the non-partisan Kaiser Family Foundation, the survey highlights a growing concern: Rising health care costs are pricing more consumers and employers out of coverage.  The Kaiser survey found three out of five employers (60%) offered coverage, down from 69% five years earlier, with most losses in small companies. Among employers with 200 or more workers, 98% offer health coverage.

Growth in health insurance costs outpaced inflation and wage growth.  Proposed solutions include high-deductible policies, disease-management programs for chronic illnesses and more use of computer technology to streamline medical records. (Special report: Healthcare crunch: How American pay their medical bills)  

"All these could have some impact at the margin, but I don't expect any to have a dramatic impact on the rate of increase overall," says Drew Altman, president of the Kaiser foundation. The Kaiser study showed premiums paid by employers increased an average of 9.2% in 2005, less than the 11.2% rise in 2004, and the lowest since 2000, when they rose 8.2%.   This year, the average annual premium for family coverage hit $10,880, with employers paying an average of 74% of that cost and workers paying the rest. Workers this year paid on average $2,713 toward family coverage, or $1,094 more than they paid five years ago, the survey found.

Helen Darling, head of the National Business Group on Health in Washington, says those numbers may be low.   "The average we see is more like $12,000 per family," says Darling, who says the USA needs a multi-pronged approach to dealing with rising costs. Fighting obesity, improving patient safety and investing in technology are just three areas to attack, she says.  "We have to understand this is unaffordable and affecting everyone," she says. "We have to work together."

Starbucks Chairman Howard Schultz, speaking at a health costs roundtable sponsored by cable channel CNBC, called on companies to offer health insurance, saying it's a "moral obligation."  Earlier, he told Washington state congressional representatives Starbucks will spend more on health insurance for employees this year than on coffee, according to the Associated Press. "It's completely non-sustainable," he said, even for companies such as his that "want to do the right thing."


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