Health insurance premiums are eating American workers’ raises

Premiums for employer-sponsored coverage rose a modest 3 percent in 2014, new research from the Kaiser Family Foundation and HRET shows.

That’s a much smaller increase than the double-digit hikes that were regular in the 1990s and 2000s. But that doesn’t necessarily mean workers are feeling relief: while premiums are growing slowly, insurance deductibles have grown by nearly 50 percent next year placing a different type of burden on workers. And even with this years slow growth, the long term trend doesn’t look great: premiums growth has hugely outpaced workers’ raises since 1999.

And premiums for individuals hit $6,025, Keep in mind, this isn’t necessarily what individuals are paying: this is the total price for health insurance, with both the employer and the worker each typically kicking in some share of the bill.

This chart is just crazy. It shows, over the past 15 years, workers’ contributions to their health insurance growing nearly four times faster than workers’ earnings. This means that much of workers’ raises are being funneled into their health insurance plans, rather than into their pockets.

This chart explains why, even with premiums rising slowly, it might not feel to workers they’re actually getting a better deal. Deductibles have grown 47 percent since 2009; 34 percent of workers are now enrolled in health insurance plans that have a deductible of $2,000 or higher.

While premiums grow slowly, workers are essentially asked to spend money in other places with these rising deductibles.