Health care affordability is worsening in California, with health care costs rising significantly faster than household income, and more than half of the state’s residents saying they or a family member skipped or delayed care in the past year because of cost, according to a report released Tuesday by the UC Berkeley Labor Center.
The analysis focuses on the growing costs of job-based health coverage, which is how most Californians under age 65 get health care, from 2002 to 2022.
During that period, median household income grew an average of 3% each year, while health care premiums and deductibles rose an average of 7% and 9% each year, respectively.
“(T)hese trends in higher premiums and in more and larger deductibles have resulted in a serious erosion of job-based coverage affordability,” the analysis says.
The report comes as advisers for the California Office of Health Care Affordability, a new state agency tasked with slowing health care spending growth, are meeting to discuss how to best tackle the problem.
In 2002, when typical employer-based health plans did not have deductibles, insurance premiums made up 4.2% of median household income, according to the report. By 2022, when large deductibles had become more common, the combined costs of premiums and deductibles had risen to 12.2% of median household income.
“I knew that health care affordability was a real challenge for Californians, but I was really struck looking at the trends the last 20 years just how much faster premium growth and deductible growth has been than income and wages,” said Miranda Dietz, UC Berkeley Labor Center policy research specialist and coauthor of the report. “It’s not just that everything is getting more expensive. It’s that health care in particular is eating up a bigger and bigger chunk of people’s budgets.”
The report analyzed figures from several sources, including consumer surveys and administrative data, such as information that state health care agencies collect from health plans each year.
The survey data found that 52% of Californians say they or a family member skipped or delayed health care in the past year because of cost concerns, 36% have medical debt, and 27% have problems paying a medical bill.
Those who sacrificed care reported missing dental checkups, medical tests or treatments, or mental health care. They also forfeited or delayed filling prescriptions, cut pills in half, or skipped doses. Among those who missed care, 50% say it made their condition worse.
It’s not clear whether the 52% represents an increase from previous years, Dietz said, but it is concerning, nonetheless. Other recent research at the state level has found similar estimates.
“Regardless of what the trend has been, that’s high,” she said. “That’s a lot of Californians who are skipping or delaying care they need.”