Health Insurance Premiums Cutting into Employees’ Wages

Doctor and Patient
by Eric Lendrum


A new study reveals that rising health insurance premiums have been dramatically cutting into the pay that employees should be earning.

As Axios reports, the findings by the Journal of the American Medical Association (JAMA) Network Open determined that families with workplace health insurance may have lost as much as $125,000 in earnings over the last 30 years. This trend is especially impacting low-income employees.

This is due to the fact that premium growth has consistently outpaced wage growth, thus making for a larger portion of a worker’s paycheck than any other contribution, resulting in higher losses as the overall salary stays roughly the same in comparison to the rise in health insurance premiums. Since premiums generally don’t change based on income levels, the impact is far more devastating for low-income workers than high-income workers.

The overall rising cost of health insurance is also part of the problem, with the average workplace health plan costing $24,000 for family coverage in 2023. Employers generally cover about three-quarters of the cost.

For historical comparison, healthcare premiums in 1988 made up just 7.9% of a worker’s compensation. In 2019, that rate was 17.7%.

Our results depict the hidden costs of increasing health insurance premiums for the U.S. worker: less opportunity for wage growth and a heavier burden of health insurance premiums on lower-paid workers,” the authors of the study declared.

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Eric Lendrum reports for American Greatness.
Photo “Doctor and Patient” by Ilmicrofono Oggiono. CC BY-SA 2.0.






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