Aug 5, 2019

Health care is gobbling up your wages

Bob Herman

American incomes have barely changed over the past 20 years on an inflation-adjusted basis, and that's due in large part to the exploding costs of health coverage.

The big picture: More people are plunging deeper into debt as the costs of housing, college and consumer goods greatly outgrow their paychecks. And those paychecks have been stagnant because employers are shoveling more money toward workers' health insurance.

Between the lines: Employers consider a block of compensation for every employee. Health insurance, which is exempt from taxes, has eaten up a lot more of that block over time.

  • In 1999, the average health insurance coverage for a family consumed 14% of the average household income, according to inflation-adjusted figures from the Census Bureau and the Kaiser Family Foundation.
  • By 2017, family coverage absorbed more than double that amount, to about 31% of take-home pay.
  • Health insurance has hovered consistently around 31% of household income since 2012, as companies shifted their employees to plans that had steady premiums but higher deductibles and out-of-pocket costs — a strategy that has largely backfired.

The bottom line: Controlling the costs of employer coverage means pushing back against the health care system, and more employers are doing this as they reach breaking points.

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Caitlin Owens

The growing employer health care crisis

Reproduced from Peter-Kaiser Health System Tracker; Chart: Axios Visuals

The past decade has seen enormous growth in health care costs paid by both employees and employers, creating the context for some of today's biggest political debates as well as teeing up more problems for the future.

Yes, but: There are some signs that employers have maxed out their ability to shift costs to employees.

Go deeperArrowAug 16, 2019
Caitlin Owens

How employers are tackling health costs

Illustration: Rebecca Zisser/Axios

Employers have more power over our health care system than anyone else, and they're getting more creative with how to wield it to lower costs, according to a new survey of large employers.

Why it matters: U.S. health care spending is going to become increasingly unsustainable until employers — which cover a plurality of Americans — decide they've had enough.

Go deeperArrowAug 14, 2019
Drew Altman, Kaiser Family Foundation

Health care costs as much as a new car

Illustration: Aïda Amer/Axios

Buying a new car every year would be a very impractical expense. It would also be cheaper than a year’s worth of health care for a family.

Why it matters: The cost-shifting and complexity of health insurance can hide its high cost, which crowds out families’ other needs and depresses workers’ wages.

Go deeperArrowAug 23, 2019