Health Insurance Takes More Out Of Workers’ Paychecks

People who receive health insurance benefits through their job pay considerably more than just a few years ago to purchase health plans that include higher deductibles and greater cost-sharing, a new analysis from the University of Minnesota’s State Health Access Data Assistance Center (SHADAC) shows.

The average annual premium for an individual health insurance policy offered by employers rose $267, or 4.4 percent, to $6,368 between 2016 and 2017—nearly twice the increase recorded between 2015 and 2016 (2.3 percent). In addition to a rise in premiums, researchers saw significant increases in the amount that workers pay in insurance deductibles and co-pays in 2017.

Researchers at SHADAC, with support from the Robert Wood Johnson Foundation (RWJF), analyzed employer-sponsored health insurance (ESI) among private sector workers between 2016 and 2017 using the most recent data available from the Medical Expenditure Panel Survey.

Nationwide, the analysis shows that the percent of eligible U.S. workers receiving health coverage through ESI held steady in 2017, at 73.5 percent, representing nearly 60 million employees.

“Attention has been focused on cost increases in the federal and state insurance marketplaces, but most people get coverage through their own or a family member’s employer and face rising costs,” said Lynn Blewett, Director of SHADAC. “While employers continue to offer insurance benefits to their employees, they are increasing the worker share of rising costs.”

The analysis shows:

• Annual premiums for single coverage increased in 15 states in 2017, with increases ranging from 5.2 percent in Pennsylvania to 11.5 percent in Wyoming.

 

• Nationwide, the average annual deductible for single coverage rose to $1,808 in 2017 an increase of $112 or 6.6 percent. Nearly half of workers enrolled in ESI plans (48.7 percent) had a deductible at or above $1,300 for an individual or $2,600 for a family.

 

• 16.1 percent of ESI enrollees nationwide had a separate deductible for prescription drugs in 2017. In 10 states, more than 20 percent of employees (including 47.3 percent in Mississippi) faced such a deductible.

 

• Average annual out-of-pocket limits for single-coverage ESI rose to $4,246 nationwide, an increase of $147, or 3.6 percent, between 2016 and 2017. Required co-pays for office visits rose 2.4 percent for primary care and 4.2 percent for specialist care.

 

“Premiums, out-of-pockets and deductibles are on the rise for the majority of Americans who get their health insurance through work,” said Mona Shah, a program officer at RWJF. “Cost increases at this level aren’t sustainable and require a renewed commitment to improving the effectiveness and value of health care services, so insurance can be more affordable for everyone.”