Health plan premiums, deductibles account for an increasing piece of employee incomes: study

Workers’ contributions to their health plan premiums and deductibles increased at a faster rate than wages over the past decade. (zimmytws/Shutterstock)

Workers’ contributions to their health plan premiums and deductibles increased at a faster rate than wages over the past decade—with these costs accounting for an increasing share of income, according to a new study. 

Researchers at The Commonwealth Fund analyzed data from the Medical Expenditure Panel Survey’s Insurance Component, which polls 40,000 employers nationwide on health costs. They found that deductibles increased by 4.8% between 2016 and 2018, and premium contributions increased on average by 4.2%. 

Median income, meanwhile, increased by 3.4% in that same window, according to the study. 

Webinar

Curating a Higher Level of Personalized Care: Digital Health + Mom

A long-term digital health strategy is needed to respond to the technology demands of the modern patient while thriving as an independent hospital in a fiercely competitive market. In this webinar, Overlake and one of its digital health partners, Wildflower Health, will discuss how Overlake has approached digital health and why it chose to focus early efforts on expectant moms within its patient population.

“Employer health coverage is leaving millions of families exposed to high and potentially unaffordable costs,” David Blumenthal, M.D., president of The Commonwealth Fund, said on a call with reporters on Wednesday. 

RELATED: ACA reduced racial, ethnic coverage disparities, with Medicaid expansion states faring the best, report finds 

As these trends continued over time, the amount of income going toward healthcare has increased in tandem, according to the study. In 2008, average contributions exceeded 10% of the median income in just seven states. By 2018, that had increased to 42 states. 

In 16 states, largely concentrated in the South, contributions exceeded the median income by more than 12% in 2018, according to the study. 

“People across the country are not experiencing employer health insurance cost equally,” Sarah Collins, Ph.D., vice president for healthcare coverage, access and tracking at the Commonwealth Fund and the study’s lead author, said on the call. 

The researchers did note, however, that there are signs that the tide is changing, and employers realize they’ve reached a limit with how much cost-shifting they can continue to do. Other studies and surveys also back this trend, with the National Business Group on Health finding its members are seeking out more innovative alternatives to manage costs

RELATED: Mercer—Employers are looking beyond high-deductible health plans to solutions that empower workers 

In the fund’s study, the rate of increase for premiums and deductibles was at its lowest point in the 2016 to 2018 window, while the median income remained largely flat. From 2014 to 2016, for example, deductibles increased on average by 8.6% while premiums went up by 4.9%.  

The median income increased by 3.5% in that same window. 

“Employers are indeed in a real bind,” Blumenthal said. “They have as a solution transferred more costs on to their employees, but there’s a pretty widespread opinion right now that that approach to managing the healthcare benefits they provide has run its course.” 

The most yawning gaps were earlier in the decade, the study found. Between 2008 and 2010, deductibles increased by 8.9% on average and premiums increased by 4.7%, while the median income declined by 1.5%. 

Suggested Articles

The nation’s highest court grappled with a key Affordable Care Act case Tuesday, with $12 billion in payments to insurers hanging in the balance. 

A nationwide effort to improve and coordinate patient safety measures will strive to make a connection between workplace and patient safety.

Cigna is in talks with New York Life Insurance Co. to sell off its group benefits insurance business in a deal that could be worth $6 billion.