Growth in Premiums, Deductibles Outpaces Income

Commonwealth Fund numbers show health insurance costs gobbling up larger share of family income
Robert Calandra

Leaving income in the dust

The average annual growth in the combined cost of employees’ contributions to health insurance premiums and deductibles has outpaced growth in median household income in every state in the country.  

A Commonwealth Fund study  examined trends in employer coverage over the past decade to determine how much workers spend on premiums and deductibles compared with median household incomes. Researchers used data from the Medical Expenditure Panel Survey – Insurance Component, considered the most comprehensive national survey of U.S. businesses on health insurance. 

The study found that, on average, the employee share of premium amounted to 6.8% of median income in 2018. That is up from 5.1% in 2008.

The average annual employee premium for a single plan in 2018 was $1,427 while the average annual employee contribution toward teh premium for a family plan was $5,431. But there was a wide range among the states, according to the Commonwealth Fund study. For example, for a single plan, the average premiums ranged from $5,971 in Tennessee to $8,432 for Alaska. Similarly, the range for family coverage went from $17,337 to $22,294 in New Jersey. 

Average deductibles also grew faster than median income over the decade. In 2008 the average deductible worked out to be 2.7% of a middle-income family's income. By 2018, it was 4.7%.

The total cost of premiums and potential spending on deductibles in 2018 for a single health insurance plan was $1,846 while the combined costs for a family was $7,388.