If you get health insurance through work, like almost half of Americans, the numbers from the past 20 years might make you think you’ve gotten a raw deal. An opinion piece published in JAMA Health Forum lays them out:
From 2000 to 2021, employee contributions toward health coverage increased from $2,554 to $5,968, or from 3% of household income to 7% of household income.
Total compensation, including employer contributions to health insurance, increased by 20% from 2000 to 2021. But when you subtract employee contributions to health insurance, median family household income increased by only 7%, accounting for inflation.
The bottom line: Most of the increase in worker compensation in the past 20 years has gone toward health insurance.
While the costs of health insurance have increased, this hasn’t resulted in increased value for employees. Deductibles have increased from $545 to more than $3,000, or 3% of household income before insurance starts paying for services.
Health insurance doesn’t always protect people from the cost of catastrophic illness. In a study of patients newly diagnosed with cancer, 76% of those with private health insurance reported “major financial hardship.”  41% of Americans with health insurance avoided getting medical care because they feared insurance wouldn’t cover the costs, according to the Policygenius 2022 Health Insurance Survey.
Having health insurance doesn’t always mean you can access care either. Only 60% to 69% of patients in a study on primary care access were able to get a new patient physical examination, and almost 35% had to wait at least a month. 
The result is that a growing part of workers’ compensation is tied up in something that’s gotten less valuable.
“It’s part of your compensation,” says Kevin Schulman, a professor of medicine at Stanford University and a co-author of the JAMA piece with Adita Narayn. “It’s not coming out of (your employer’s) pocket. It’s coming out of your wages.”
The rising price of health insurance
Costs are increasing even faster in recent years. The average premium for employer-sponsored family coverage rose 20% over the past five years,  and inflation may spur faster increases in the near future.
“I don’t think people understand how much increase we’ve seen in health insurance premiums in the past 20 years,” Schulman says.
Most of those increases reflect higher prices. The business model for many hospitals is to charge as much as they can to commercial health insurance companies, who can pass those costs on to employers, Schulman says.
As a result, hospital prices are all over the place, even for the same service. New price transparency rules reveal that they may be charging insurance companies more because they have the most ability to pay — resulting in cheaper prices for patients who pay cash in some areas.
The biggest major health care reform over the past 20 years, the Affordable Care Act, improved access and lowered the cost of health insurance for many people, but it did little to address the cost of health care overall.
“We are spending more and more, yet many health metrics don’t show gains in quality or equity of care,” says Joseph Dieleman, an associate professor at the University of Washington.
“There are many piecemeal solutions,” Dieleman adds, but “it’s hard to imagine substantive change without something more drastic.”
One issue is that many people may not realize how much more they’re paying and how much less they’re getting — they don’t realize how much bigger their raise could be if it weren’t for rising health insurance costs.
“The American public should realize how much they’re paying out of pocket for their local hospital and ask really hard questions about why,” Schulman says.
Employers have a role to play in pushing for more value in the insurance plans they offer their employees. But maybe they also feel powerless to stem the rising tide of health care prices.
“Maybe it’s too hard to understand,” Schulman says. “Maybe the whole way we get health insurance is leading to really flawed inputs into the whole process.”
Image: Scharvik / Getty