Rising health care costs mean lower wages

Over the past decade, employers have cut back on wage increases in order to cover the ever-increasing cost of health insurance, according to economists. Recently released figures—from the U.S. Census Bureau, the Kaiser Family Foundation, and the Health Research & Educational Trust—show that since 1999 the cost of employer-provided health insurance rose, on average, 160%, while median household income, adjusted for inflation, fell by 8.9%.

“Workers ultimately bear the cost, and they bear the cost in lower wages,” said Katherine Baicker, professor of health economics in the Department of Health Policy and Management, in an Oct. 1, 2011 article in the Milwaukee-Wisconsin Journal Sentinel. “When health care costs go up and health insurance premiums go up, workers’ wages rise less quickly than they would otherwise.”

Median household income, which now stands at roughly $50,000 in the U.S., has dropped by about $4,900 since 1999, according to the Census Bureau. While much of that decline is due to the overall weak economy, the growing cost of health care has also been a factor for workers who get health coverage through their employers.

Read the Milwaukee-Wisconsin Journal Sentinel article

Learn more

U.S. Must Focus Health Resources on High-Value Care to Control Rising Health Care Spending (HSPH News)

Health Insurance and Uncle Sam (Harvard Public Health Review)