Employer-provided health insurance is the most common form of coverage in the US.
Premiums frequently outpace inflation and pay growth, causing employers to bear a significant amount of the rising expenses and putting financial strain on families.
However, access to health coverage does not eliminate affordability issues. According to a recent Commonwealth Fund survey, 43% of those covered by employer-sponsored insurance expressed difficulty affording healthcare.
Increasing premiums may also limit wage growth, particularly for ethnic minorities and low-income families, according to the most recent JAMA study, which examined pay and employer-sponsored premium data from 1988 to 2019.
Though a comparable number of persons were enrolled in employment plans, premiums accounted for an average of 7.9% of pay in 1988, rising to 17.7% in 2019.
If expenses had remained constant, the median family with employer coverage would have earned $8,774 more in yearly income for 2019.
That decrease in wages has “real consequences for US families,” as many struggle to afford unexpected expenses or have already racked up medical debt, researchers said.
However, the financial burden resulting from rising premiums does not affect all families equally. In 2019, premiums as a percentage of pay in the 95th percentile of wages were 3.9%, compared to 28.5% for families at the 20th percentile.
Premiums accounted for 13.8% of total income for White families in 2019, compared to 19.2% for Black families and 19.8% for Hispanic families with employer-sponsored coverage.
“By receiving lower earnings historically, Black and Hispanic households shoulder a greater proportion of the increase in health care premiums as a percentage of their compensation, a trend that persisted throughout all 3 decades of our analysis,” researchers wrote.