Health insurance premiums increase compared to family income

JAMA published a piece in which Dr. Ezekiel Emanuel, formerly a health policy advisor for the White House, proposed a pair of indexes to track how health expenses have changed as a percentage of the median household income. The paper goes into the merits and issues with the indexes (one looks at health insurance premiums, whereas the other also includes other out-of-pocket expenses such as deductibles), but the clear trend is that health expenses are rising relative to median income. In 1999, the average cost of an employer-sponsored insurance plan cost less than 15% of the median household income, whereas in 2016 (less than twenty years later), the percentage was more than 30%. Health costs have been rising rapidly, and it remains to be seen whether they are currently high enough that meaningful policy changes will be enacted.

It should be noted that the paper did not say that families are spending about a third of their incomes on health insurance. For example, employers may have been absorbing most of the premium increases so that employees are often shielded from the underlying numbers. That does not mean that employees have not been affected, however, since employers paying more for health insurance often means that employees miss out on corresponding increases in pay.