Health Reform WK-EDGE Health care premiums for family coverage cost more than $21K per year
Monday, October 26, 2020

Health care premiums for family coverage cost more than $21K per year

By Lauren Bikoff, MLS

Deductibles are both much more prevalent and much higher than they were a decade ago.

Annual family premiums for employer-sponsored health insurance rose 4 percent to average $21,342 in 2020, according to the Kaiser Family Foundation. The 2020 KFF Employer Health Benefits Survey found that on average, workers this year are contributing $5,588 toward the cost of family coverage, with employers paying the rest. The survey was conducted from January to July as the COVID-19 pandemic and economic crisis unfolded and may not capture its full impact on costs and coverage, KFF noted. However, the survey found that the annual change in premiums is similar to the year-to-year rise in workers’ earnings (3.4 percent) and inflation (2.1 percent), though over time what employers and workers pay toward premiums continues to rise more quickly than wages and inflation. Since 2010, average family premiums have increased 55 percent, at least twice as fast as wages (27 percent) and inflation (19 percent).

In 2020, 83 percent of covered workers have a deductible in their plan, similar to last year and up from 70 percent a decade ago. The average single deductible stands at $1,644 for workers who have one, similar to last year’s $1,655 average but up sharply from the $917 average of a decade ago. These two trends result in a 111 percent increase in the burden of deductibles across all covered workers. "Conducted partly before the pandemic, our survey shows the burden of health costs on workers remains high, though not getting dramatically worse," KFF president and CEO Drew Altman said. "Things may look different moving forward as employers grapple with the economic and health upheaval sparked by the pandemic."

Mental health. The survey found that 83 percent of offering employers said they are satisfied with the overall choice of providers available through their insurance plans, though only 67 percent said the same about their mental health and substance abuse networks. About one in five (19 percent) described their mental health networks as somewhat or very narrow, potentially leaving workers with limited options at a time when worry and stress related to the pandemic is affecting many working Americans. "The coronavirus pandemic has increased the need for access to mental and behavioral health services, for which the provider networks are often more narrow than for other services," said Gary Claxton, a KFF senior vice president. "Some plans have been able to increase access by supporting telehealth, though it’s unclear whether such options will become a permanent feature."

The survey also found the following:

  • Offer rate holds steady. The survey found that 56 percent of employers offer health benefits, largely unchanged over the past five years. The larger an employer is, the more likely it is to offer health benefits to at least some of its workers, with about half (53 percent) of firms with fewer than 50 workers and nearly all (99 percent) firms with at least 200 or more workers offering coverage.
  • Out of pocket maximums. Virtually all covered workers are in plans with a limit on in-network cost sharing (called an out-of-pocket maximum) for single coverage. Those limits vary widely, with 11 percent of covered workers in plans with maximums of less than $2,000 and 18 percent of covered workers in plans with maximums of at least $6,000.
  • Wellness programs. Most large firms (81 percent) offer at least one type of wellness or health promotion program. Among those that offer such a program, relatively few (11 percent) view the programs as very effective at reducing the firm’s health care costs.

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