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Analysis

Health Insurance Costs Accelerating for Workers

By John Commins  
   October 01, 2018

The average premium for employer-sponsored plans rose $267, or 4.4% between 2016 and 2017, which is twice the increase recorded between 2015 and 2016. 

Employees who get their health insurance through their job are paying a lot more now than just a few years ago in premiums, co-pays and deductibles, a new study finds.

The average annual premium for an individual health insurance policy offered by employers rose $267, or 4.4%, to $6,368 between 2016 and 2017—nearly twice the increase recorded between 2015 and 2016 (2.3%), according to a new analysis from the University of Minnesota’s State Health Access Data Assistance Center.

In addition, the SHADAC researchers saw significant increases in workers' deductibles and co-pays in 2017.

"Attention has been focused on cost increases in the federal and state insurance marketplaces, but most people get coverage through their own or a family member's employer and face rising costs," Lynn Blewett, director of SHADAC, said in a media release.

"While employers continue to offer insurance benefits to their employees, they are increasing the worker share of rising costs," Blewett said.

SHADAC researchers analyzed employer-sponsored health insurance among private sector workers between 2016 and 2017 using the most recent data available from the Medical Expenditure Panel Survey.

Nationwide, the analysis shows that the percent of eligible workers receiving health coverage through their job held steady in 2017, at 73.5%, representing nearly 60 million employees.

The analysis shows:

  • Annual premiums for single coverage increased in 15 states in 2017, with increases ranging from 5.2% in Pennsylvania to 11.5% in Wyoming.
     
  • Nationwide, the average annual deductible for single coverage rose to $1,808 in 2017 an increase of $112 or 6.6%. Nearly half of workers enrolled in employer-sponsored plans (48.7%) had a deductible at or above $1,300 for an individual or $2,600 for a family.
     
  • 16.1% of employer-sponsored plan enrollees nationwide had a separate deductible for prescription drugs in 2017. In 10 states, more than 20% of employees (including 47.3% in Mississippi) faced such a deductible.
     
  • Average annual out-of-pocket limits for single-coverage work-sponsored plans rose to $4,246 nationwide, an increase of $147, or 3.6%, between 2016 and 2017. Required co-pays for office visits rose 2.4% for primary care and 4.2% for specialist care.  

"Cost increases at this level aren’t sustainable and require a renewed commitment to improving the effectiveness and value of healthcare services, so insurance can be more affordable for everyone," said Mona Shah, a program officer at Robert Wood Johnson Foundation, which sponsored the study.

America's Health Insurance Plans spokesperson Cathryn Donaldson did not dispute the findings, but said that "premiums and deductibles track directly with the underlying cost of health care, which continues to rise overall."

Over the past decade, Donaldson says, employer health costs have moved in a narrow band and premium growth has been modest.

Donaldson said employer-sponsored health plans are also offering employees more coverage options, including high deductible plans with lower monthly premiums that can be coupled with tax-deductible health savings accounts.

"High deductible plans with HSAs offer consumers more financial protection, control over their health care dollars, and greater peace of mind," she said. "In fact, more Americans are now choosing a HSA with a high deductible plan than ever before because it empowers them to make affordable health care choices that aligns with their health care needs."

 

“While employers continue to offer insurance benefits to their employees, they are increasing the worker share of rising costs.”

John Commins is a senior editor at HealthLeaders.


KEY TAKEAWAYS

Nationwide, the average annual deductible for single coverage rose to $1,808 in 2017 an increase of $112 or 6.6%.

Nearly half of workers enrolled in employer-sponsored plans had a deductible at or above $1,300 for an individual or $2,600 for a family.

Average annual out-of-pocket limits for single-coverage work-sponsored plans rose to $4,246 nationwide, an increase of $147, or 3.6%, in 2017.


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