American workers’ health insurance premiums and deductibles continued to tick upward in 2018, outpacing wage growth and inflation, according to a new national survey of employers.
The increases extend a long-running trend that is pinching workers and their families, and fueling widespread anxiety about medical costs.
The average cost of a family health plan is now $19,616 a year, with workers contributing $5,547, or about a quarter of the cost, the survey by the nonprofit Kaiser Family Foundation found. Employers are picking up the balance of the cost of workers’ health benefits.
More than a quarter of all workers with health coverage now have a deductible of at least $2,000 for single coverage. In 2009, by comparison, just 7% of covered workers had to pay $2,000 out of pocket before their health coverage kicked in.
“As long as out-of-pocket costs for deductibles, drugs, surprise bills and more continue to outpace wage growth, people will be frustrated by their medical bills and see health costs as huge pocketbook and political issues,” said Drew Altman, president of the foundation.
Rising healthcare costs — particularly for Americans who do not get health coverage from an employer, but buy it on their own — have fueled the Trump administration’s attacks on the Affordable Care Act, often called Obamacare.
In response, the current administration has taken several steps to increase the availability of less comprehensive health plans that don’t offer a full range of benefits.
But the new report underscores that even health plans offered by employers — and not subject to all the benefit mandates in the 2010 healthcare law — are extremely expensive.
Health insurance premiums have been rising more modestly than deductibles, a trend that continued in 2018, with the average premium for family coverage rising 5%, according to the survey. But employers’ rising health costs are often singled out as a cause for stagnant wage growth in recent years, as businesses have put money into health benefits that might otherwise have gone to workers’ paychecks.
Employers — particularly small businesses — also frequently cite rising health costs as a reason why they stop offering health benefits.
Surveys over the last two decades have documented a slow erosion in employer-provided health coverage.
In 2000, the annual Kaiser survey found that 68% of employers offered health benefits. In 2017, the share had dropped to 53%.
The 2018 survey suggests that trend may be slowing, or even reversing, however, as the share of employers offering health benefits increased to 57%.
That change is consistent with employer surveys conducted by the Employee Benefit Research Institute, or EBRI, a Washington-based research organization that started seeing an uptick in employers offering benefits in 2015.
The increase started that year with employers with 100 to 999 employees, EBRI found.
In 2016, there was an increase for firms with between 10 and 99 employees. And in 2017, the share of firms with fewer than 10 employees offering health benefits rose.
Paul Fronstin, who directs EBRI’s health research and education program, said the changes probably reflected the labor market, which has been tightening for years as the unemployment rate has fallen during the long recovery following the Great Recession a decade ago.