The 161 million Americans with employer-sponsored health insurance are facing substantial increases in out-of-pocket (OOP) costs, according to a study funded by the Commonwealth Fund and published on the Health Affairs web site. In 2007, adults with employer coverage paid an average of $729 annually in OOP costs for medical services, including deductibles and other forms of cost sharing such as co-payments and co-insurance. That represents a 34-percent increase from 2004, when the average OOP burden was $545. Health plans covered a slightly smaller percentage of overall expenses in 2007 than 2004, but growth in overall health spending was the chief culprit behind rising out-of-pocket costs.
Overall, employer-sponsored insurance (ESI) paid 81.4 percent of medical bills for all workers in 2004 and 80.1 percent in 2007, which was due to increases in the percentage of plans with deductibles and in average deductible levels. Individuals who spent more than 5 percent of their income for medical services (excluding premiums) were considered underinsured. For people with incomes at 200 percent of the federal poverty level, about 20.3 percent of those with ESI exceeded this threshold in 2007, up from 16.5 percent in 2004. Affordability of coverage also declined at all incomes levels between 2004 and 2007. About 18 percent of those with family incomes at 200 percent of poverty spent more than 10 percent of their incomes out of pocket in 2007, up from 13 percent in 2004.
