New report finds workers’ health insurance and deductibles account for 10% or more of median income

Working families bear an increasing share of health insurance costs as premiums and deductibles continue to rise.

Although employer health insurance coverage has proven to be relatively stable during the COVID-19 pandemic, the costs of this insurance are consuming a greater share of income for working families in every state than a decade ago. according to a new report from the Commonwealth Fund.

According to the report, State Trends in Employer Premiums and Deductibles, 2010-2020median incomes have not kept pace with rising health insurance costs and deductibles, which are fueled by high health care and drug prices.

The report is part of the Commonwealth Fund’s ongoing series examining state-level trends in the overall cost of employer health insurance. It provides a state-by-state analysis of the cost of insuring workers in premiums, deductibles and as a percentage of income, from 2010 to 2020.

Key findings include:

• Premium contributions and deductibles totaled 11.6% of median income in 2020, compared to 9.1% in 2010. On average, the cost of employee premiums was 6.9% of income in 2020, compared to 5.8% in 2010. The average annual deductible for a middle-income household amounted to 4.7% of income, up from 3.3% in 2010. Together, the average total cost of premiums and potential deductible expenses for individual and family insurance policies rose to 8 $070. Costs ranged from a low of $6,528 in Hawaii to a high of over $9,000 in Florida, Kansas, Missouri, South Dakota and Texas.

• In a growing number of states, workers risk spending 10% or more of their income on health insurance premiums and deductibles. In 2020, workers in 37 states exceeded this threshold, up from 10 states in 2010. Middle-income workers in Mississippi and New Mexico faced the highest potential costs relative to income (19% and 18%, respectively).

• In nearly half of the states, middle-income households faced average deductibles that left them underinsured and exposed to high payouts. That’s from just one state in 2010. The Commonwealth Fund defines an “underinsured” measure as having a deductible equivalent to 5% or more of income. Underinsured people are more likely to struggle to pay their medical bills and more likely to skip care due to cost. The highest average deductible relative to median income in 2020 was 7.4% in New Mexico.

• Workers in low-wage companies contribute more to family bonuses than workers in higher-wage firms. Workers at companies with lower average salaries paid on average a larger share of their overall premium for family coverage – and therefore a higher amount – than workers at companies with higher average salaries.

In Kentucky in 2020:

• Employee deductibles were $3,600, or about 6.1 percent of the state’s median income;

• Employee contributions were $4,370, or about 7.5% of the state’s median income.


Only about 6% of US working-age adults reported losing employer health insurance during the COVID-19 pandemic and few became uninsured, largely due to essential supports provided by market subsidies. the Affordable Care Act (ACA) and expanding Medicaid eligibility.

However, the financial burden of commercial insurance is a persistent problem that undermines the economic well-being of Americans and forces many to forego necessary medical treatment. If passed, the Build Back Better Act would make the most sweeping improvements to the ACA since it was passed in 2010. These include a substantial increase in market premium subsidies, a lower affordability threshold for plans employers and a new zero premium market coverage option. for Medicaid-eligible adults without access to Medicaid in their state. However, these improvements only last until 2025.

The study authors suggest additional reforms to improve health insurance for American workers, including:

• Tackling high health care prices that drive up premiums and employer deductibles; for example, adding a public plan option to markets and other approaches.

• Inform workers covered by the employer of their options for enrolling in subsidized market plans or Medicaid.

• Limit deductibles and out-of-pocket costs in market plans by improving cost-sharing reduction grants.

See the full report here.

The Commonwealth Fund’s mission is to promote a well-performing health care system that provides better access, better quality and greater efficiency, particularly for the most vulnerable people in society, including those on low incomes, uninsured people and people of color. The Fund fulfills this mandate by supporting independent research on health care issues and providing grants to improve health care practice and policy.

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