Premium contributions by employees in employer health plans totaled 11.5% of the median U.S. income in 2019, according to a new survey from The Commonwealth Fund. That’s up from 9.1% a decade ago. In Arizona, Texas and Mississippi, the employee’s share was 12% or higher. The primary factor was the state’s median income.
Spending on premiums and deductibles averaged $7,806 last year. That ranged from $5,535 in Hawaii to $8,500 in nine states, including Florida, Texas, Tennessee and Missouri. Hawaii had the lowest average premium contribution of $718; Massachusetts had the highest, at $1,793. Hawaii had the lowest deductible of $1,264 for a single enrollee, while Montana’s $2,521 was the highest.
The economic damage caused by COVID-19 may cause the employee share of premium and deductible to rise in 2021 – particularly for those in the middle-income brackets, The Commonwealth Fund concluded.
Americans are paying more and more for their healthcare coverage, and it appears the COVID-19 pandemic may exacerbate the trend, according to a new survey of nearly 24,000 employer groups respondents from The Commonwealth Fund.
The survey not only demonstrated a steady rise in premiums and deductibles for individuals over the past decade – which has outpaced wage growth during that same period of time – but the trend is likely to be magnified by job losses or cuts in wages from employers in response to the economic distress caused by COVID-19 and the related business shutdowns.
The stressors were considerable even before the pandemic. According to the survey, the average single employee covered 21% of their overall premium last year, while employees with families contributed 28%.
“If premiums and deductibles do not fall this year, household income lost during the current economic crisis will increase cost burdens for middle-income families,” the survey concluded.
The U.S. unemployment rate was 6.9% in October, according to the latest jobs report from the Bureau of Labor Statistics. That’s nearly double the 3.6% unemployment rate from October 2019. Moreover, the unemployment rate in many states is even higher: 12% in Nevada and 9.3% in California, among others.
"While the recession initially had the greatest impact on industries most affected by the pandemic, those effects are now spilling over into other sectors,” The Commonwealth Fund said. “This means that even if premium contributions and deductibles do not change, they could take up a larger share of workers’ incomes in 2020 and 2021."
As a result, The Commonwealth Fund concluded that "people with low and moderate incomes may decide to go without insurance if it competes with other expenses — for example, housing and food, which consumed 35% of average family income in 2019. People who are uninsured or underinsured may forgo getting tested for COVID-19, delay getting care if they fall ill, or delay getting vaccinated when that becomes possible."
There are some provisions of the Affordable Care Act that can fill in the gaps: If an individual’s premium is more than 9.83% of their income, they are eligible for premium tax credits. However, that only applies to single individuals; enrollees with family coverage are not covered. The Commonwealth Fund suggested that Congress and the incoming Biden administration could fix this loophole, as well as provide more premium assistance as part of the ACA.