Health plan premiums are taking up an increasing portion of employees’ incomes, according to a new study.
Researchers at the Commonwealth Fund found that premium contributions and deductibles among enrollees in employer plans increased from 9.1% of incomes a decade ago to 11.5% of incomes in 2019.
Premiums and deductibles accounted for more than 10% of employees’ incomes in 37 states in 2019, compared to 10 states in 2010. In nine states, premiums and deductibles account for 14% or more of household incomes, according to the study.
“Workers across the income spectrum have experienced steady growth in the combined cost of premiums and deductibles. But people living in states with lower median incomes are doubly burdened,” the researchers wrote. “On average, workers in states where the median income is lower than national median income face higher absolute costs compared to people in states with higher median incomes.”
The average premium contribution for single coverage nationally was $1,489 in 2019, according to the report. Average contributions were lowest in Hawaii at $718 and highest in Massachusetts at $1,793.
Premium contributions in family plans averaged $5,719 nationally in 2019, ranging from a low of $3,685 in Michigan and a high of $8,202 in South Carolina.
The average deductible for single coverage was $1,931, ranging from a low average of $1,264 to $2,521 in Montana for 2019. Average deductibles accounted for 5% or more of median income for people living in 20 states last year, according to the report.
These trends are likely to be exacerbated by the COVID-19 pandemic, according to the report, as an economic downturn will further stagnate wage growth. There are also indications that some insurers are raising premiums to account for the increased costs associated with the pandemic.
And even if premiums remain flat or decrease, a recession will impact workers’ ability to afford care, according to the report.
“In the employer market, even if premium contributions and deductibles fall, remain unchanged, or grow more slowly, incomes could fall or grow more slowly, leaving household cost burdens unchanged or higher,” the researchers wrote.