Work-based health insurance is taking a bigger bite than ever out of Oklahoma workers’ paychecks, according to a national study released Wednesday.
Using data from the U.S. Department of Health and Human Services, The Commonwealth Fund determined that employee-paid premiums and deductibles grew 27% faster than the state’s median household income between 2008 and 2018.
That means premiums and deductibles now equal 12.3% of median income, compared to 9.7% a decade ago. The statistic does not mean Oklahomans actually spend that much on those two items, since many households do not meet their deductibles every year.
According to the study, the average household deductible is almost $3,000 a year, or almost twice what it was a decade ago.
“Deductibles have gone about as high as they can go,” Sara Collins, one of the study’s authors, said in a conference call. “That’s what we’re hearing from employer surveys.”
The study looked at single, family and combined coverage costs in each state and the nation as a whole. Oklahoma’s actual costs were slightly below the national average, but were on the high end when measured as a percentage of median income.
Oklahoma’s median income is relatively low.
The study found premiums and deductibles equaled 10% or more of median household income in 42 states in 2018, compared to just seven in 2008. Mississippi, at 16.5%, was the highest.
Washington state, at 7.7%, was the lowest. Washington also had the lowest family premiums and the second-lowest single-coverage premiums. Washington has implemented several reforms over the past decade, largely triggered by the Affordable Care Act.
In Oklahoma, premiums and deductibles combined rose to an average of $7,311, compared to $4,474 in 2008. Nationally those totals were $7,388 in 2018 and $4,160 in 2008.
The Commonwealth Fund’s David Blumenthal said health care costs are continuing to rise while utilization has actually declined. He also said per capita expenditures for Medicaid and Medicare have remained stable.
“There are two theories for dealing with prices,” said Blumenthal. “One is competition. The other is regulation.”
While many politicians favor competition, Blumenthal said he is skeptical of its effectiveness.
“Employers have never been effective in forcing down prices,” he said. “The providers are very consolidated and powerful. The employers are fractured.”
Because providers have monopolies or near-monopolies in many communities, they have more leverage in determining costs, Blumenthal said.
“It’s very hard to increase prices while volume is falling, but that’s what’s happening in health care,” he said.