As health costs continue to increase, health spending by families with large employer health plans has increased 2 times faster than workers’ wages over the last 10 years.
Health costs continue to increase and in turn health spending by families with large employer health plans has increased 2 times faster than workers’ wages over the last 10 years, according to research. The Peterson—Kaiser Health System Tracker assembled a brief to outline these trends in employee spending.
“As health costs rise, enrollees in large employer plans face higher health spending both through rising premium contributions and increased cost-sharing when they use services. On average, health spending by families with large employer health plans has increased two times faster than workers’ wages over the last decade,” explained the authors. “This increase has been driven in part by rising deductibles, which are an increasingly prominent feature of many employer plans.”
The brief evaluated both premiums and cost-sharing payments together and added the average family premium for a family of four for those with employer coverage to the average cost-sharing for a worker in order to assess the impact of healthcare on a household’s budget.
When looking at the portion of the premium that employees are responsible for, the brief found that the average family spent $4706 on premiums and $3020 on cost-sharing for a combined cost of $7726 in 2018—an 18% increase in health costs by employees and their families from 2013.
Furthermore, over the last 10 years, health costs incurred by families covered by large employers increased 67%. Also, over the last decade the average health costs paid on behalf of workers in the form of premium contributions for family coverage increased 51%.
Other main findings of the report include:
“When considering the affordability of healthcare, it is important to put it in context with the relatively low increases in workers’ wages. Unlike premium contributions which impact most enrolled households, cost-sharing affects those with higher utilization of medical services more drastically,” noted the authors. “While average payments towards deductibles are still relatively low, they have increased considerably in the context of total household budgets.”
Overall, the brief outlined how although health insurance continues to pay a large portion of the cost of covered benefits, employees continue to have to pay more and more out-of-pocket expenses as costs continue to increase.