- Families with employer-sponsored health insurance lost out on an average of more than $125,000 in earnings over the past 30 years as growing premiums cut into their wages, according to a study published in JAMA Network Open.
- Premiums as a percentage of compensation were significantly higher for Hispanic and Black families over the more than 30-year study period compared with White families. Lower-income people were also more burdened by increasing health insurance costs.
- Rising premiums are likely linked to lower earnings, increased income inequality and wage stagnation, researchers said.
Health insurance offered through employers represents the single largest source of coverage in the U.S.
But premiums often rise faster than inflation and wage growth, frustrating employers who are on the hook for a large portion of climbing costs and putting increased financial pressure on families.
Yet access to health coverage doesn’t negate affordability challenges either. Forty-three percent of people covered under employer-sponsored plans reported it was difficult to afford healthcare, according to a recent survey by the Commonwealth Fund.
Increasing premiums may also be restricting wage growth, especially for racial minorities and families who already earn less, according to the latest JAMA study, which analyzed compensation and employer-sponsored premium data from 1988 to 2019.
Though a similar number of people were enrolled in employer plans, premiums represented an average of 7.9% of compensation in 1988, compared with 17.7% in 2019.
If costs had stayed the same, the median family with employer coverage would have earned $8,774 more in annual wages in 2019.
That decrease in wages has “real consequences for US families,” as many struggle to afford unexpected expenses or have already racked up medical debt, researchers said.
But the financial burden from growing premiums doesn’t impact families equally. In 2019, premiums as a percentage of compensation at the 95th percentile of earnings was 3.9%, compared with 28.5% for families in the 20th percentile of earnings.
For White families, premiums represented 13.8% of compensation in 2019, compared with 19.2% among Black families and 19.8% for Hispanic families with employer-sponsored coverage.
“By receiving lower earnings historically, Black and Hispanic households shoulder a greater proportion of the increase in health care premiums as a percentage of their compensation, a trend that persisted throughout all 3 decades of our analysis,” researchers wrote.