Families with employer-sponsored health plans have seen average health care spending rise twice as fast as wages over the past decade, according to a research brief from the Peterson Center on Healthcare and Kaiser Family Foundation (KFF).
For the brief, researchers analyzed a sample of claims data from KFF's Employer Health Benefits Survey and IBM MarketScan Commercial Claims and Encounters to examine trends in employee health care spending—which includes spending on coinsurance, copayments, deductibles, and premiums—over more than a decade.
The researchers found average health care spending, which encompassed spending on premiums and cost-sharing payments, for families enrolled in employer-sponsored health plans increased by 67% from 2008 to 2018, rising from $4,617 to $7,726. In comparison, the researchers found average health care spending paid by employers via premium contributions increased by 51%, rising from from $10,008 in 2008 to $15,159 in 2018:
The researchers attributed the increases in average health care spending to rising premiums and out-of-pocket spending.
According to the brief, the increase in employees' average health care spending has outpaced wage growth—with employees' wages increasing by 26% from 2008 to 2018, compared with the 67% growth in average health spending:
In addition, the researchers found changes in the average health care costs that employees' health insurers have covered. For example, the researchers found the average share of prescription drug costs covered by insurers increased from 79.2% in 2003 to 88.9% in 2017, while the average share of costs for outpatient services covered by insurers decreased from 85.7% in 2003 to 80.8% in 2017:
The researchers wrote, "[P]atients in large employer plans are paying more of their medical expenses out-of-pocket and contributions to their families' premiums have increased." They wrote that the analysis shows "[t]he growth in out-of-pocket costs continues to outpace increases in workers' wages, and while many employer plans cover a significant portion of health costs, the payments made by enrollees have increased significantly over the last decade."
As such, the researchers noted,"When considering the affordability of health care, it is important to put it in context with the relatively low increases in workers' wages." They wrote, "Unlike premium contributions which impact most enrolled households, cost-sharing affects those with higher utilization of medical services more drastically." The researchers continued, "To people with employer coverage, deductibles are the most visible element of an insurance plan and can create financial hardships when a large expense must be met at once" (Minemyer, FierceHealthcare, 8/15; Groppe, USA Today, 8/15; Owens, "Vitals," Axios, 8/16; Rae et al., Peterson-Kaiser Health System Tracker, 8/14).