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Archives
High Premiums, Fewer Insured
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| Business Week-The share of the working-age population
without any kind of health insurance, private or
public, rose from 13% in 1987 to 16% in 2000 despite
good economic growth over the period.
Why? Big increases in the cost to workers for
company-offered health insurance, according to Harvard
University economist David M. Cutler. From 1988 to
1999, inflation-adjusted employee payments for family
health insurance doubled, to about $1,600 in 1999
dollars. As a result, there was a fall in the "take-up
rate"--the share of eligible employees who sign up.
Since health-care costs are zooming up these days at
a 5.5% annual rate, "continued declines in health
insurance are quite possible," Cutler writes. But he
resists concluding that the answer is to control
medical spending more tightly. Cutler says that to
stop workers from dropping employer-based insurance
because premiums are too high, "the government could
well decide to subsidize private insurance coverage.
By Peter Coy |
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