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Study: Employer Health Insurance Costs Continue To Outpace Wage Growth

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If you have health insurance through your employer, chances are the amount of money you put toward health care has gone up in the last few years. That’s according to a new study from the Commonwealth Fund.

The report says Kentucky employees put 12.9 percent of their yearly income toward health expenses, that’s up from 8.4 percent in 2008.

Researchers measured the costs by looking at two factors: premiums and deductibles. A premium is the amount a person pays each month for their insurance plan. In 2008, on average, a single person with a health insurance plan paid $806 dollars for their monthly premium. By 2017, the average was $1,453.

Researchers also considered deductibles, the amount of money an employee has to pay before their insurance begins covering health costs. In 2008, the average deductible for a single person was $950. In 2017, the deductible average jumped up to $1,878.

The cost of premiums and deductibles in Kentucky aren’t so different from the national average, but there’s one key difference, according to Sara Collins, vice president of health care coverage at the Commonwealth Fund. That difference is the median income in Kentucky versus the national median income.

In Kentucky, the average is about $46,000; nationally, it’s $62,000. 

“So even though Kentuckians pay about the same amount of their premiums as people in a lot of other states do, because their incomes are lower on average, people are spending a greater share of their income on their premiums and their deductibles,” Collins said.

And Collins said what makes an insurance plan more expensive in Kentucky is how much sicker people are here.

“States that have high medical costs tend to have higher premiums. So people are asked to contribute to the same amount, at least as a percent of the premium,” Collins said.

The rise in deductibles and premiums for Kentucky employees follows a similar national trend. Employers are passing more health insurance costs onto their workers. Average employee premium contributions across single and family plans amounted to 6.9 percent of U.S. median income in 2017, up from 5.1 percent in 2008, according to the Commonwealth Fund study.

Collins said this is due to the rising cost of health care. But she said the trend isn’t sustainable.

“What we know from research is that the more people have to spend out-of-pocket [when thinking about going to the] doctor, the less likely they are to go,” she said. “So there is a big barrier to getting needed care when people are facing higher and higher deductibles.”

Lisa Gillespie is WFPL's Health and Innovation Reporter.