Employer health benefits can be too costly for low-income workers
Employees at lower-wage firms are far less likely than other workers to be enrolled in employer-based health plans, a new Kaiser Family Foundation study found.
Only one in three of these staffers are covered, compared to 63% of workers at other companies.
Workers at companies with many lower-wage employees are less likely to be eligible, according to Kaiser’s annual employer health benefits study, released Wednesday. They also have to pay more for these plans.
Only two-thirds qualify for benefits, compared to 81% at other firms. And these staffers pay annual premiums that average $7,050 versus just under $6,000 elsewhere.
“These folks don’t have a lot of money so the contribution becomes pretty expensive for them,” said Gary Claxton, a senior vice president at Kaiser.
The 2020 Democratic primary campaign has put a spotlight on employer-based plans, which cover about 153 million Americans. Candidates such as former Vice President Joe Biden are defending the current system, while progressives such as Sens. Bernie Sanders and Elizabeth Warren want to move to a national, government-run health insurance system to ensure that everyone is covered.
The share of Americans covered by employer polices has been drifting downward over the past two decades, though it has stabilized in recent years amid the good economy. Still, Claxton noted, it’s not rising even though unemployment is at a record low.
Although the poverty rate fell and 2.3 million more Americans found jobs last year, the share covered by private insurance did not statistically change, according to a recent US Census Bureau report. That indicates that low-income people are not landing positions with benefits.
The Democratic debate over whether to maintain employer-sponsored coverage comes at a time of relatively slow growth in health care costs.
Annual family premiums rose 5% to roughly $20,600 this year, Kaiser found. Employers pick up about $14,600 of the tab.
Still, the cost of coverage has risen far faster than earnings or inflation over the past decade. Family premiums have increased 54% and workers’ contributions have jumped 71%. By contrast, wages are up 26% and inflation 20%.
Deductibles, meanwhile, stayed roughly flat at an average of $1,655 for single coverage among workers who face a deductible. But that’s up from an average of $826 a decade ago.
“The single biggest issue in health care for most Americans is that their health costs are growing much faster than their wages are,” said Drew Altman, Kaiser’s chief executive.