Report: Worker Health Insurance Contributions Outpaced Income Past 10 Years

A new Commonwealth Fund report finds that workers and their families are spending more of their incomes on health care.

“Trends in Employer Health Care Coverage, 2008–2018: Higher Costs for Workers” shows that U.S. employee contributions to health insurance outpaced growth in income between 2008 and 2018 in every state.

It’s the most comprehensive national survey of U.S. employer health plans, surveying more than 40,000 private sector companies in 2018. 

Premium contributions and deductibles together accounted for 11.5% of median household income by 2018, up from 7.8% percent a decade earlier.

Between 2008 and 2018, employee premium contributions grew at an average annual rate of more than 4%, ranging as high as 6.4% between 2010 and 2012. This rise outpaced growth in median household incomes, which dipped to a low of –1.5% during the deep recession from 2008 to 2010 and more recently, from 2016 to 2018, was 3.4%.

In Florida, the combined employee contribution to monthly premium costs and annual deductibles rose from $5,043 in 2008 to $7,925 in 2018.

Dr. David Blumenthal, president of the Commonwealth Fund, says more workers are choosing to go without insurance, especially now that they Affordable Care Act individual mandate is no longer being enforced.

“Employers are indeed in a real bind,” Blumenthal said. “The per capita costs that have been incurred by Medicare and Medicaid have been pretty stable since the enactment of the Affordable Care Act. But per capita cost for employees have been going up.”

The report shows the most cost burdened families live in southern states like Florida, where median incomes are lower, on average.

Blumenthal  says health care is going to eb a hot topic during next year’s presidential election, pointing out that Democratic presidential candidates have proposed plans that build on the ACA or replace it with a public plan like Medicare; and Republican reform ideas tend to favor replacing the ACA with market-oriented approaches and more state control. 

The Commonwealth Fund report uses data from the federal Medical Expenditure Panel Survey–Insurance Component to look at two trends in employer coverage over the last decade: how much workers are paying, on average, in premiums and deductibles, and the size of these costs relative to median income in each state.

The survey had an overall response rate of 67.8%.

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