Even with Employer Health Coverage, Many Workers Find Themselves Underinsured

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Millions of Americans with employer-provided health benefits are facing substantial increases in their out-of-pocket costs, according to a new study published today on the Health Affairs Web site. The higher costs are particularly burdensome for people who are sick or have modest incomes.

The Commonwealth Fund–supported study, which examined trends in the comprehensiveness of employer-sponsored insurance over a three-year period, found that in 2007, adults with employer coverage faced an average of $729 annually in out-of-pocket costs for medical services, including deductibles, copayments, and coinsurance. That represents a 34 percent increase from 2004, when the average out-of-pocket burden was $545.

"In the United States, if you are sick and earn a modest income, then you are probably underinsured — even if you have employer-based health coverage," the researchers wrote. In 2007, among those with family incomes at 200 percent of poverty who were among the top 25 percent in health care spending, the underinsured rate was 71 percent.

The study team, led by Jon R. Gabel of the National Opinion Research Center (NORC), found that health plans covered a slightly smaller percentage of overall expenses in 2007 than 2004, but growth in overall health spending was the principal reason for higher out-of-pocket costs.

"As the nation debates health reform, these findings highlight the need to ensure that workers and their families will have access to affordable health insurance coverage that protects them from high out-of-pocket spending regardless of whether they are healthy or sick," said Commonwealth Fund President Karen Davis.