Sep 26, 2019 - Health

Employer-based coverage is unaffordable for low-wage workers

Illustration of heart monitor charting health care costs

Illustration: Sarah Grillo/Axios

Employer-based health insurance isn’t a monolith — the cost and generosity of that coverage varies widely. And that likely affects how open workers would be to “Medicare for All” or a public insurance option.

The big picture: Democrats’ health care plans would offer a better deal to many low-wage workers than to their higher-wage counterparts.

By the numbers: The Kaiser Family Foundation’s annual survey of employer health benefits illustrates this divide.

  • Roughly 36 million American workers earn $25,000 per year or less — retail workers, personal care attendants, warehouse workers and many more.
  • Just 33% of workers at lower-wage firms offering health benefits are covered by their employer’s health benefits, well below the 63% share at other firms offering coverage.
  • These low-wage workers pay an average of $7,000 per year just toward the premium for a family plan.
  • Workers in low-wage firms also face much higher deductibles: a $2,679 annual single deductible, while at other firms, the average is $1,610.

The bottom line: There is no way to gild this lily — that is the definition of unaffordable. And family coverage isn’t even available to these workers much of the time.

  • Whether low-wage workers ultimately support Democrats’ health care plans is still a matter of personal preference — whether resistance to change or distrust in the government outweigh the financial burdens of health insurance.
  • But either “Medicare for All” or a public option would offer much better coverage than these workers have now.

On the other end of the spectrum are workers with very good coverage — including those with union-negotiated contracts and even, at some higher-wage firms, workers who don’t have to make a premium contribution at all.

  • But as study after study documents, these workers also struggle with their out-of-pocket costs, especially when they or their family members become ill.
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