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Report: In most states insurance premiums make up 10 percent of income

Article

In 37 states, insurance premiums cost up to 10 percent or more of workers’ median income.

Report: In most states insurance premiums make up 10 percent of income

The portion of a worker’s income devoted to healthcare insurance coverage is higher now than it was a decade ago.

According to a report from The Commonwealth Fund, the median income has not kept pace with rising insurance cost and deductibles with premium contributions and deductibles totaling 11.6 percent of median income in 2020 compared to 9.1 percent in 2010. On average, employee premiums amount to 6.9 percent of their income in 2020, compared to 5.8 percent in 2010. Meanwhile the average annual deductible in 2020 made up 4.7 percent of income for a middle-income household, where it was only 3.3 percent in 20210.

In 2020, workers across 37 states found they were spending 10 percent or more of their earnings on premiums and deductibles up from only 10 states in 2010. Middle-income workers from Mississippi and New Mexico have the highest potential costs compared to their income, the report says.

“Employer health insurance is taking a big bite out of many working families’ incomes, leaving them with less money to spend on housing and food, and saddling millions with medical debt,” Sara Collins, lead author of the study and Commonwealth Fund vice president for health care

coverage, access, and tracking, says in a news release. “But policy solutions are available, including making the Build Back Better Act’s temporary coverage enhancements permanent and fixing the Affordable Care Act’s family coverage glitch. It’s time for policymakers to find ways to reduce the financial burden of health insurance coverage on working families.”

About half of the states saw middle-income houses saw deductibles which left them underinsured and paying for care out of pocket in 2020, compared to only one state’s workers being at risk a decade prior. The highest average deductible relative to median income was 7.4 percent in New Mexico in 2020, according to the report.

The situation is even worse for workers in lower-wage companies as they are left contributing more to their overall premium for family coverage, on average, than workers in companies with higher average wages, the report says.

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Jennifer N. Lee, MD, FAAFP
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health