Premium and Deductible Cost Sharing: A Dozen Key Findings from the Commonwealth Fund

by Clive Riddle, December 7, 2018 

CMS has just touted the National Health Expenditure growth of 3.9% for 2017 is at historic low levels, with the Office of the Actuary stating “prior to the coverage expansions and temporary high growth in prescription drug spending during that same period, health spending was growing at historically low rates. In 2017, health care spending growth returned to these lower rates and the health spending share of GDP stabilized for the first time since 2013.” 

Meanwhile, The Commonwealth Fund paints a different picture from another perspective, and has just released a 21-page DataBrief: The Cost of Employer Insurance Is a Growing Burden for Middle Income Families, with lead author Sara Collins commenting “The cost of employer health insurance premiums and deductibles continues to outpace growth in workers’ wages. This is concerning, because it may put both coverage and health care out of reach for people who need it most — people with low incomes and those with health problems. Policies that would reduce health care burdens on employees include fixing the Affordable Care Act’s family coverage glitch, requiring employers to exclude some services from the deductible, and increasing the required minimum value of employer plans.” 

The Commonwealth Fund tells us their study uses “the latest data from the federal Medical Expenditure Panel Survey–Insurance Component (MEPS–IC) to examine trends in employer premiums at the state level to see how much workers and their families are paying for their employer coverage in terms of premium contributions and deductibles. We examine the size of these costs relative to income for those at the midrange of income distribution.” 

Here’s a dozen key findings: 

1. Average employee premium contributions for single and family plans amounted to nearly 7 percent of U.S. median income in 2017, up from 5 percent in 2008. 
2. In 11 states (Arizona, Delaware, Florida, Georgia, Louisiana, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, Texas), premium contributions were 8 percent of median income or more, with a high of 10.2 percent in Louisiana.
3. Premium and deductible costs amounted to nearly 12 percent of median income in 2017. Added together, the total cost of premiums to workers and potential spending on deductibles for both single and family policies climbed to $7,240 a year in 2017. 
4. This combined cost ranged from a low of $4,664 in Hawaii to a high of more than $8,000 in eight states (Alaska, Arizona, Delaware, New Hampshire, North Carolina, South Dakota, Texas, Virginia). 
5. In two states, Mississippi and Louisiana, these combined costs rose to 15 percent or more of median income.
6. Premiums for employer health plans rose sharply in nearly every state in 2017. After climbing modestly between 2011 and 2016, overall premiums for employer health plans (employer and employee share) grew more sharply in 2017, by 4.4 percent for single plans and 5.5 percent for family plans. 
7. Annual single person premiums rose above $7,000 in eight states (Alaska, Connecticut, Delaware, Massachusetts, New Jersey, New York, Rhode Island, Wyoming) and family premiums were $20,000 or higher in seven states (Alaska, Connecticut, Massachusetts, New Jersey, New York, West Virginia, Wyoming) and the District of Columbia. 
8. Average premiums for families increased overall in 44 states and the District of Columbia.
9. As employer premiums have risen, so have workers’ contributions. Between 2016 and 2017, employee premium contributions rose by 6.8 percent to $1,415 for single-person plans and by 5.3 percent to $5,218 for family plans.
10. Contributions for single plans increased in 32 states, ranging from a low of $675 in Hawaii to a high of $1,747 in Massachusetts. 
11. Contributions for family plans rose in 35 states and the District of Columbia, with the lowest increase in Michigan ($3,646) and the highest in Delaware ($6,533).
12. The average deductible for single policies rose to $1,808 in 2017, a 6.6 percent increase. Average deductibles rose in 35 states and the District of Columbia, ranging from a low of $863 in Hawaii to a high of about $2,300 in Maine and New Hampshire.