Half of all Americans get their health insurance through work. Trouble is, doing so is becoming less and less affordable — especially for already low-wage workers.
In 2019, the Kaiser Family Foundation Employer Health Benefits Survey — an annual account of roughly 2,000 small and large businesses’ employer-sponsored insurance — found the average annual premium to cover a family through work was a whopping $20,576, and $7,188 for an individual. Employers cover most of that, but families still contributed an average of $6,015 in premiums, and single Americans covered about $1,242 of the annual cost.
The kicker? Over the past 10 years, the cost of the portion of employer-sponsored health insurance premiums that falls on American families has increased by 71 percent. Overall, premiums have gone up 54 percent since 2009. That’s faster than the rate of inflation and faster than the average wage growth.
Nearly half of all Americans get their health insurance through work, a system that covers roughly 153 million people. And for lower-wage workers it’s a system that is increasingly unaffordable.
Workers at companies with a significant number of low-wage employees (which the Kaiser Family survey quantifies as a company in which at least 35 percent of employees are making an annual salary of $25,000 or less) have lower premiums than those who work at companies with fewer low-wage workers, probably because their plans cover less. But at the same time, workers at firms with a significant number of low-wage employees are faced with high-deductible plans, and also pay a larger share of the premium cost than workers at companies with fewer lower-wage employees.
According to the survey, workers at lower-wage companies pay an average of $7,000 a year family plan — $1,000 more than employees at companies with higher salaried workers.
“When workers making $25,000 a year have to shell out $7,000 a year just for their share of family premiums,” Drew Altman, the president of Kaiser Family Foundation, said in a statement, that’s where cost becomes prohibitive. Such employees are putting almost 30 percent of their salaries toward premiums.
The takeaway is clear. Health care is getting more and more expensive, and families and employers are having to bear more of the cost, which research has shown not only has an effect on how much workers are actually getting paid, but how many workers are hired.