A new Kaiser Family Foundation study indicates employers who provide healthcare coverage to their workers in 2005 are paying a dollar more per hour to insure an employee than they did six years earlier.
Employers paid on average of $2.59 per hour in 2005, the study – which examined payroll and healthcare costs based on 2005 data – found.
The study, part of a Kaiser Snapshots in Healthcare Cost series, said employers offering coverage saw healthcare costs consume an increasing share of their overall payroll costs. The median cost of healthcare coverage as a share of payroll rose from 8.2 percent in 1999 to 11 percent in 2005.
The study notes that these figures are "substantially larger" than originally estimated by healthcare reform experts. In addition, an employer's share of healthcare costs rose steadily and significantly over the study period.
The study points to a wide range of burdens businesses now face. Employees pay more per hour for lower-paid occupations, including sales, service and laborers, compared to higher-paid occupations such as professionals, executives and technicians. Researchers found, however, that healthcare costs for lower-paid occupations make up a larger percentage of payroll due to their lower average earnings.
Larger companies have greater healthcare benefit costs, both on an hourly basis and relative to payroll costs, even though their payroll costs are greater, the study said.
The study was based on the National Compensation Survey, a nationwide survey of labor costs in private and public establishments conducted quarterly by the Bureau of Labor Statistics.
Department of Health and Human Services Secretary Michael Leavitt and lawmakers on Capitol Hill have been adamant on the need to remedy the skyrocketing costs before they jeopardize America's position as a leader in the world marketplace. Leavitt's plan is to make healthcare quality and costs more transparent to the public, thus lowering costs through what he calls "value-driven healthcare."