Thoughts on the Growing Cost of Employer Insurance for Middle Income Families

The cost of employer insurance is a growing burden for low- and middle-income families, according to a recent report by researchers at the Commonwealth Fund. Among its findings are that average employee premium contributions across single and family plans jumped to 6.9 percent of U.S. median income in 2017, up from 5.1 percent in 2008.

The Commonwealth Fund researchers used the newest data from the federal Medical Expenditure Panel Survey–Insurance Component (MEPS–IC) to examine trends in employer premiums at the state level to determine how much workers and their families are paying for their employer coverage in terms of premium contributions and deductibles. The MEPS–IC is the most comprehensive national survey of U.S. employer health plans, and surveyed more than 40,000 business establishments in 2017, with an overall response rate of 65.8 percent.

“The report shows that middle and low income families are experiencing increased cost in both premiums and deductibles for insurance coverage provided by their employers. So much so, that in most states, they are paying well over 9% of their wages for insurance coverage,” says Janet Heinrich, DrPH, RN, FAAN, a research professor at the George Washington University Milken Institute School of Public Health. Prior to joining the faculty at GWU, Heinrich served as senior advisor at the Center for Medicare and Medicaid Innovation of the Centers for Medicare & Medicaid Services.

“Continuing increases in health care costs are the primary driver for these increases in premiums and deductibles,” Heinrich says. “This means that income-related cost protections in insurance marketplaces are not enough. We need system-wide efforts to slow medical spending, such as reducing the cost of prescription drugs. We need to address the increasing economic strain of health care costs facing middle-income and poor Americans, as the mid-term elections reminded us.”

“The Cost of Employer Insurance Is a Growing Burden for Middle-Income Families,” by Sara Collins and David Radley, is available here. It includes detailed state data.