shoulder increasing share of health insurance costs

Rising Health Insurance Costs

New report finds that working families shoulder increasing share of health insurance costs.

By Pete Mercer

A report from Commonwealth Fund has found that in 37 states, worker’s health insurance premiums and deduct-

ibles take up to 10% or more of their median income. State Trends in Employer Premiums and Deductible, 2010-2020 found that median incomes have not kept pace with rising health insurance costs and deductibles, which are fueled by high health care and drug prices.

Sara Collins, lead author of the study and Commonwealth Fund Vice President for Health Care Coverage, Access, and Tracking, said in a media release, “Employer health insurance is taking a big bite out of many working family’s incomes, leaving them with less money to spend on housing and food, and saddling millions with medical debt.”

What the report found

The State Trends report found that premium contributions and deductibles totaled 11.6% of median income in 2020, a 9.1% increase from 2010, and middle-income households faced average deductibles that left them underinsured to high out-ofpocket costs. Additionally, workers in lower-wage companies contribute more to family premiums than workers in higher-wage firms do.

David Blumenthal, M.D., Commonwealth Fund President, said, “Middle-class workers in a majority of states spend 10% or more of their family budgets on health insurance premiums and deductibles. That’s a burden that many families are finding increasingly difficult to shoulder, as their incomes fail to keep pace with rising health care prices.”

The authors also suggest additional reforms to improve health insurance for U.S. workers. Policymakers should address the high health care prices that are driving up employer premiums and deductibles, as well as informing workers with employer coverage about their options to enroll in subsidized marketplace plans.

Consequences of high insurance premiums

Aside from the increased costs for premiums and deductibles, these trends pose a greater threat to the health of those affected. The report says that while only about 6% of U.S. working-age adults reported losing their health insurance during the pandemic, the financial burden of commercial insurance is causing many American workers to avoid necessary medical treatment altogether.

Blumenthal said, “There are also health implications: people who are worried about costs are less likely to get the health care they need. Solving this problem will require policy actions to extend affordable health insurance coverage to all Americans. But we also need to get at the root, which are the high costs that make health care so expensive for everyone.”