US Healthcare Reaching Crisis Stage

On average, the annual out-of-pocket costs for employees of large companies have more than doubled since 1998, to $2,126 this year, according to Hewitt Associates, a benefits consulting firm. Hewitt is expecting a 22 percent jump next year, to $2,595.

Employers still pay the bulk of their workers' health care bills, but their contribution has slipped over the last five years, to 70 percent of total health care costs from 75 percent, according to Hewitt's latest survey of 300 employers with 5,000 or more workers, released last week.

And more workers are going without insurance, even at large companies. According to a report issued yesterday by the Commonwealth Fund, which studies health policy issues, 9.6 million workers and family members at companies with more than 500 employees did not have employer-provided health coverage in 2001.

At the nation's largest private employer, Wal-Mart Stores, only about half the roughly one million domestic employees are in a company health plan, said Mona Williams, a Wal-Mart vice president. Of the 500,000 others, half are ineligible because they were hired too recently; many depend on parents, a spouse or a government program for coverage, Ms. Williams said.

Largely because of the booming cost of prescription drugs, for example, Medicare covers less of its beneficiaries' health care expenses than at any time since the program was established in 1965, according to Robert M. Hayes, president of the Medicare Rights Center, a patient advocacy group.

As a result, the elderly paid 22 percent of their average median income, or $3,757, for health care last year — a larger proportion than the 20 percent of income they spent before the advent of Medicare.

The number of Americans without insurance has, meanwhile, grown to 43.6 million at last count, the highest since 1998, according to the Census Bureau. Billions of dollars of their health costs are absorbed by hospitals or federal programs, and experts say that the uninsured skimp on care, compared with people who have workplace coverage. Still, uninsured families this year are averaging $772 in out-of-pocket spending, said Jack Hadley, a health care researcher at the Urban Institute, a policy research group in Washington.

All these trends fall most heavily on people who are sick or who otherwise are heavy consumers of medical services.