[Discussion] Health Care System Catch-all

The American health care system is complicated, and so are proposals to change it. The 2020 Democratic presidential primary campaign has focused a lot of attention on whether to preserve the private, job-based insurance system that covers 153 million people or replace it with a single-payer “Medicare for All” program that covers everyone.

The latest data from the Henry J. Kaiser Family Foundation’s annual survey of employers underscores why this debate is so important.

In the past 10 years, the average premium for job-based health insurance that covers a family has risen 54%, to $20,756. Moreover, the amount of that premium workers pay for family coverage has increased 71%, to $6,015.

During that same decade, the share of workers whose health plans carry deductibles requiring them to pay hundreds or thousands of dollars in out-of-pocket costs before their insurance coverage kicks in has increased from 63% to 82%. The size of the average deductible has grown from $826 to $1,655.

At the same time, income hasn’t kept pace. From 2009 to 2019, earnings have gone up just 26%.

Given that employment is the single-largest source of health coverage in the United States, the increases go a long way toward explaining why Americans are so fed up with the current health care system.

U.S. workers and their families with employer-based insurance are paying more and more each year for their health coverage and for out-of-pocket costs, which is consuming a bigger share of their income.

These trends date back even further than the past 10 years, and costs have been rising steadily and outpacing workers’ incomes for decades, previous Kaiser Family Foundation surveys have found.

This year, the average family coverage plan employers offered cost 5% more than in 2018, compared to a 3.4% increase in workers’ earnings. That year-over-year change may appear less troublesome than the longer-term findings, but these relatively small increases in premiums for job-based health insurance have added up over time and have increasingly burdened workers.