Middle-income workers and their families are spending an average of 10.1% of the median income on their health premiums and deductibles, according to a new report.
The Commonwealth Fund analyzed national data from 2024 on the employer-sponsored insurance market and found that the premium contributions for family coverage ranged from an average of $5,584 in Oregon to $9,148 in California. In 19 states, the average premium and deductible contribution topped 10% of that state's median income.
Health insurance costs varied significantly between employers of different sizes and industries, while healthcare costs fluctuated between geographies, contributing to the broad range, according to the study.
The study found that premium contributions alone in five states topped the threshold in which employer coverage is considered unaffordable under the Affordable Care Act: West Virginia, Mississippi, North Carolina, Florida and Louisiana.
In these regions, this may qualify the employee and their family members, or at times just the family members, for premium assistance through tax credits on an individual market plan, the researchers said.
In addition, the study found that deductibles in single coverage equaled 5% on average of median income for an individual household in 2024. The share of income going to insurance deductibles ranged from 1.8% in the District of Columbia to 6.4% in Kentucky.
A deductible that's equal to more than 5% of an individual's income is a sign that they are underinsured, according to the report, and lack sufficient protection from healthcare costs. Large deductibles can encourage employees to skip out on care they need to avoid the cost.
It also makes it more likely that they will incur medical debt, the researchers said.
The study said that if employers' premium costs rise, that will likely increase out-of-pocket costs for workers and their families at a time when many budgets are already tight.
"If these higher costs are combined with sluggish income growth, the cost of coverage and healthcare could take a larger bite out of workers’ incomes at a time when they are also dealing with higher prices for other household goods," the researchers wrote.
To address this, the study said employers can adjust out-of-pocket requirements and premiums based on the income of employees. In the long term, managing costs will require a shift in the broader trends around healthcare pricing and spending, according to the report.