Study Shows Employer-Sponsored Insurance A Growing Burden For Consumers

By Consumers For Quality Care, on June 3, 2019

A new study from the Commonwealth Fund highlights how employer-sponsored health insurance plans have become a growing burden for consumers, according to The Inquirer. Roughly 150 million Americans receive health insurance through their employer, making it the most common type of health insurance for individuals under 65-years-old.

The study found that millions who receive their health insurance through their employers are now paying more than 10 percent of their income towards their health care. Employer-sponsored health plans have long been thought to be affordable, but as premiums have increased 212 percent in a decade, more of the cost burden has been passed from employers to consumers.

With wages relatively stagnant, rising health-care costs are becoming more burdensome for families, even if the percent they pay remains the same.

In all, the study found that around 23.6 million consumers with employer-sponsored health plans spend at least 10 percent of their income on health insurance, including out-of-pocket costs and premiums. Of those 23.6 million individuals, 13.3 million spent 10 percent or more on premiums alone, 6.2 million on out-of-pocket expenses (not including their premiums), and 4.1 million on both their premiums and out-of-pocket costs.

Consumers’ cost burden also varied from state to state. On the low end, the monthly median for both out-of-pocket costs and premiums was $1,500 in Hawaii. South Dakota’s median was on the high end at $5,540.

Researchers looked at the portion of workers spending more than 10 percent of their income on premiums, out-of-pocket costs, or both because the Affordable Care Act requires employers with more than 50 employees to offer “affordable” insurance, meaning a monthly premium is not more than 9.56 percent of their monthly salary. People whose premiums are more than 10 percent of their income are eligible for subsidies.

Currently, however, this rule only applies to individual plans. Researchers say expanding this rule could help ease the cost burden for consumers.