How much U.S. households with employer insurance spend on premiums and out-of-pocket costs: Commonwealth Fund

“In the years since the Affordable Care Act (ACA) took effect, public debate over the cost and quality of insurance has focused primarily on health plans sold through the marketplaces established by the law,” Susan L. Hayes, Sara R. Collins, and David C. Radley write for the Commonwealth Fund. “There has been less attention on the 158 million Americans who have employer-based coverage. Faced with rising premiums, U.S. employers are sharing more of their costs with their workers, particularly through higher deductibles, copayments, and coinsurance. Recent research indicates that employer plan premium contributions and out-of-pocket costs, like those for prescription drugs, are eating up an increasing portion of household budgets. In this brief, we use findings from the Current Population Survey (CPS), a federal survey of households, to report on the amounts that workers under age 65 and their dependents spent on premium contributions for their employer coverage and on out-of-pocket costs for health care. We also report on the percentage of people in each state who faced premium contributions or out-of-pocket expenses that were high relative to their income in 2016–2017 …. This brief complements an earlier Commonwealth Fund state-level analysis of the size of employee premium contributions and deductibles reported by employers. The previous report looked at what workers were at risk of spending out of pocket to meet their deductibles when they used their insurance. This brief examines what workers report actually spending….  The median, or midpoint, of annual household spending on employer insurance premium contributions ranged from $500 (Hawaii) to $3,400 (South Dakota) in 2016–2017. In 11 states, households in the top 10 percent of spending on premium contributions paid $9,000 or more. Across states, 6 percent to 17 percent of people with employer coverage had household premium contributions that were high relative to their income. High premium contributions relative to income were common across the South.  Median annual out-of-pocket spending on medical care ranged from $360 (Hawaii) to $1,500 (Nebraska). In four states, households in the top 10 percent of out-of-pocket expenses spent $7,000 or more on these items. Across states, 4 percent to 11 percent of people with employer coverage had high out-of-pocket costs relative to household income. An estimated 23.6 million Americans with employer coverage had high premium contributions or high out-of-pocket costs relative to income, or both. Total Household Spending The median amount spent on both premiums and out-of-pocket costs ranged from $1,500 (Hawaii) to $5,540 (South Dakota).” Susan L. Hayes, Sara R. Collins, and David C. Radley, “How Much US Households with Employer Insurance Spend Premiums OOP,” Commonwealth Fund.