RENO -- The cost of health insurance in Nevada rose nearly five times faster than wages in the past six years, according to a new report.

And although a new minimum wage law that includes incentives for employers to provide insurance for workers takes effect next week, some observers say that with costs for premiums skyrocketing, being able to afford health insurance remains difficult, not only for low-wage earners but also for employers and middle-income earners.

The report released this week by Families USA, a nonprofit health care consumer advocacy group based in Washington, D.C., said that during the past six years, health care premiums for Nevadans jumped 76.6 percent, while median earnings rose 15.7 percent.

For family health coverage provided through employers, annual health insurance costs jumped from $6,688 in 2000 to $11,811 in 2006, the study said. In comparison, median earnings increased at a slower pace during the same time, rising from $25,411 to $29,369.

"Nevada families have been hit hard in the pocketbooks due to skyrocketing health costs and stagnant wages," said Ron Pollack, Families USA executive director. "As a result, Nevadans are paying much larger portions of their paychecks on health care, and health care is becoming less and less affordable."

A new law passed by voters boosts Nevada's minimum wage to $1 above the federal standard, currently $5.15 an hour. When the law takes effect Tuesday, Nevada minimum wage earners will make $6.15 an hour and be in line to receive higher raises if Congress ups the federal level.

A provision in the law exempts employers who offer workers "qualified" health care coverage.

A qualified plan is one in which employees and their dependents are covered at a cost to the employee that does not exceed 10 percent of the worker's gross taxable income. That means, health insurance for an employee who makes about $10,000 a year must cost no more than $1,000.

Given the escalating costs of insurance, that's a tall order, concedes Bob Fulkerson, executive director of the Progressive Leadership Alliance and a major force behind Nevada's minimum wage initiative.

Still, Fulkerson said it's better than nothing.

"If you don't have health insurance, getting an extra dollar an hour will help," he said.

Larry Matheis, head of the Nevada State Medical Association, said the problem is not confined to low-wage earners.

"More and more employers are either limiting their own exposure on coverage by increasing upfront deductibles, decreasing coverage of dependents, or just dropping plans entirely," Matheis said.

Also a growing number of employers are limiting retiree health care benefits, he said.

"More and more people are facing the situation of losing their group coverage and either facing very expensive private coverage or going bare," he said.

Fulkerson and Matheis said the problem will be a major issue for the 2007 Legislature.

"Providing health care benefits to workers and kids is absolutely paramount," Fulkerson said. "That's going to be the biggest issue our state has to grapple with in the next session."