Health care costs rose 7.7 percent this year, more than double the overall inflation rate and well ahead of the increase in workers' wages. Matthew Borsch, a health care analyst at Goldman Sachs Group Inc. (GS), says that Blue Cross plans actually had a 27 percent decline in operating profits in the first half of the year, compared with the same period in 2005.
Regulators in a number of states were able to push nonprofit Blue Cross plans to hold down their increases. Despite the increasing costs, about 6 out of 10 employers still offer health coverage to attract and retain workers, according to this NYTimes.com article. Even so, the rising costs of premiums is making it harder and harder for companies to raise wages and salaries.
This same article quoted a phone survey completed last May as saying, since 2000, the cost of family coverage has risen 87 percent while consumer prices are up 18 percent and the pay of workers has increased 20 percent, the survey noted. That is without counting the cost of deductibles and other out-of-pocket payments, which have also been rising.
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