It’s no secret that most Americans continue to struggle with rising healthcare costs. It’s not just the lower-class or those who have to pay for their own insurance, but also many with employer health care. As the healthcare costs keep rising, the more they’re expected to pay out-of-pocket and in co-pays.
The Commonwealth Fund (or TCF), has stated: “employer plan premium contributions and out-of-pocket costs, like those for prescription drugs, are eating up an increasing portion of household budgets.” This was discovered in a survey that found around 23.6 million people with employer coverage were paying higher premiums, higher out-of-pocket costs, or even both.
“It’s very arresting to me just to think about 24 million people with employer coverage who are living in households that spend a large share of their income on health care costs,” Sara Collins, vice president at the Commonwealth Fund. “When just thinking about … those human beings, that’s pretty striking … Some households spend almost nothing and some are spending thousands of dollars per year.”
The TCF Report
The TCF report gave a definition of what they considered a higher premium contribution.
They said, “if the total annual amount they pay for their employer plan premiums equals 10% of more of annual household income. Americans were considered to be paying high out-of-pocket costs if the total annual amount they pay out of pocket for medical expenditures not covered by their employer plan … is 10% or more of annual household income, or 5% or more for families earning less than 200% of the federal poverty level.”
This report unequivocally proves that people with employer health plans don’t necessarily have lower healthcare costs. This is a major shift that’s been happening over the past decade. Everything is getting more expensive. That includes health care costs and is burdening so many American families.
“What we’ve seen over the last few years is a steady growth in the percentage of people who are insured all year but have high out-of-pocket costs relative to their income and deductibles” to the point that “they’re considered underinsured,” Collins said. “The biggest growth in that trend is occurring among people who have employer plans.”
Growing Health Care Costs
The TCF report found that nearly 100% of the increasing out-of-pocket costs and premiums are driven specifically by the increase of healthcare costs. It’s dramatically outpacing people’s incomes which don’t seem to be moving upward fairly quickly.
“What’s really important for people to understand is that the principal driver of premium growth [and] the principal driver of out-of-pocket costs is the overall rate of growth in health care costs in the economy,’ Collins said.
U.S. healthcare costs grew 3.9% in 2017 and continues to grow.