4 Key Findings From Commonwealth Fund Reflect Rising Employee Healthcare Costs

"Employer health insurance is taking a big bite out of many working families' incomes, leaving them with less money to spend on housing and food, and saddling millions with medical debt." — Sara Collins, The Commonwealth Fund.

The Commonwealth Fund reports that the burden of healthcare costs has risen for American workers over the past decade. Their findings—published this month in State Trends in Employer Premiums and Deductibles, 2010–2020—show premiums and deductibles taking up a larger share of employee income.

The result are cost-shares that are leaving them "underinsured and exposed to higher out-of-pocket costs" over time. The following are four key findings from the report, which includes a state-by-state breakdown.

1. The percentage of median income spent on premiums and deductibles has risen to 11.6%. This is an increase from 9.1% in 2009. The 2020 total includes an average of 6.9% for premiums and 4.7% for deductibles. The total average cost was $8,070, with state-specific amounts ranging from approximately $6,500 to more than $9,000.

Of note, the 2020 premium figures for employer-sponsored coverage exceed those of marketplace plans, which were capped at 8.5% of income for 2021 and 2022.

2. Employees in 37 states spend more than 10% of their income in premiums and deductibles. This is up significantly from 10 states in 2010. Mississippi and New Mexico ranked highest among states, with these costs representing 18%–19% of worker salaries.
    
3. Employees in 22 states are considered underinsured and at risk for deferred care and medical debt. TCF defines a person as underinsured whose plan "does not provide adequate protection from high out-of-pocket costs and deductibles, excluding premiums." In 2010, only one state met this measurement threshold, which includes deductibles that are at least 5% of a person's income.

"Employer health insurance is taking a big bite out of many working families' incomes, leaving them with less money to spend on housing and food, and saddling millions with medical debt," says Sara Collins, study lead author and TCF vice president for Health Care Coverage, Access, and Tracking.

4. Not surprisingly, companies that offer higher wages pay a higher portion of employee premiums. This creates disparities among even insured workers, including the working poor—and a divide between those whose benefit costs keep services accessible and those who are left with coverage without care. The Commonwealth Fund reports that this is increasingly the case for middle-class workers as well.