May 24, 2019
For the 158 million Americans covered by employer-provided health insurance, higher premiums, deductibles and copays have become the norm as employers share more and more of the growing costs.
A new analysis by The Commonwealth Fund finds that such expenses are a growing financial burden on household budgets.
Using data from the Current Population Survey, a government-run survey, The Commonwealth Fund was able to determine the actual amount spent by households on premium contributions for their employer coverage, in addition to out-of-pocket costs for health care. The Fund determined these costs for the 2016-2017 fiscal year.
Here are some of the main findings from the analysis. (The Fund defines premium contributions and out-of-pocket expenses as "high" if individuals lived in households spending 10 percent or more of annual income on either one of those costs.)
• Nearly 24 million Americans with employer coverage were found to have either high premium contributions or high out-of-pocket costs compared to their income, or both.
• The median amount spent annually on premiums and out-of-pocket costs ranged from $1,500 in Hawaii to $5,540 in South Dakota. The median expense in Pennsylvania was $3,364, with nearly 2.1 percent incurring high costs relative to their income. In New Jersey, the numbers were worse – $4,300 and 2.6 percent, respectively.
• Across the states, six to 17 percent of people with employer health coverage had premium contributions were deemed high compared to their income — especially in the South. In 11 states, households in the top 10 percent of spending on premium contributions paid at least $9,000 a year. In New Jersey, 11.5 percent of individuals paid premiums deemed high; in Pennsylvania it was 10.9 percent of individuals. (The national average was 11.6 percent.)
One policy option could help reduce the high costs, the Fund said:
Fix the so-called family coverage glitch by pegging affordability and access to marketplace subsidies to the cost of family coverage rather than single coverage. Currently, under the Affordable Care Act, a worker with employer premium expenses for a single-person plan that exceed 9.9 percent of income may be eligible for subsidized marketplace coverage. But families that spend that much for a family plan are not eligible, creating the family coverage glitch.
View the full health care spending report and analysis by The Commonwealth Fund here.