Health consumers who think they're digging deeper into their pockets to subsidize employer-sponsored health plan costs are absolutely right, according to a report released today in the journal, Health Affairs.
"If you are sick and earn a modest income, then you are probably underinsured, even if you have employer-based health coverage," the authors wrote.
In 2007, employees on average contributed $729, or 34% more than the $545 they paid in 2004 in premiums, deductibles, and out-of-pocket costs, according to the survey from the National Opinion Research Center. The study extrapolated survey data on medical claims filed for 10 million American workers covered by health plans. The authors applied those findings to 161 million Americans covered by an employer's health plan.
"The years from 2004 through 2007 were a period of economic expansion, yet rising health care costs still eroded the value of employer sponsored coverage," said lead author Jon Gabel, a NORC senior fellow. Since then, employees "have been asked to shoulder even more of the cost-sharing burden during difficult economic times such as the United States is now experiencing."
He concluded that health reform must include constraints on health spending, "or else health insurance will become unaffordable for low-and middle-income Americans, and reform itself will be unsustainable."
The paper was co-authored by researchers at the Watson Wyatt Worldwide and was paid for by The Commonwealth Fund.
As expected, the increase in worker contributions for their healthcare was most pronounced among those who had the most healthcare expenses. For the highest-cost 1% and 10% of adults, out-of-pocket spending rose 42% and 39% respectively, to $8,703 and $3,364. This may be attributable to employees first exceeding their deductible, and then their out-of-pocket maximum cap. For the lowest 50%, spending rose 23% to $85, the authors said.
The trend is hardest on those earning less. For example, the authors reported, of those workers earning 200% of the federal poverty level in 2004, 13% spent more than 10% of their income on premiums and out-of-pocket expenses. But by 2007, that figure rose to 18%.
For people earning 400% of the federal poverty level in 2004, 2% spent more than 10% of their income on premiums and out-of-pocket medical expenses. But by 2007, that percentage doubled.