Why health insurance costs so much: ‘Out of Pocket, Out of Reach’

Health insurance is a crucial aspect of many Americans’ lives, with more than 150 million people relying on coverage through their jobs. However, as STAT investigates, the affordability of employer-sponsored health insurance is becoming a growing concern for workers and their families nationwide.

One of the key findings is that small companies are increasingly struggling to provide health benefits to their employees. While nearly all large companies offer health insurance, less than 60% of smaller firms, with 200 or fewer workers, now offer coverage – an all-time low. The rising costs of health insurance are pushing small businesses to the brink financially, forcing them to either water down their insurance plans or forego offering insurance altogether, making it harder to retain employees.

Even for small businesses that do offer health insurance, the costs are a significant burden. Deductibles at small firms are more than 50% higher than at larger companies, and unexpected surcharges from insurance companies can further strain their budgets if the number of workers enrolling increases beyond a certain threshold.

Premiums for job-based health coverage have also been rising at a much faster rate than inflation. Data shows that employers and workers collectively contributed over $1.4 trillion towards health insurance premiums in 2024, compared to just $132.5 billion in 1987. This exponential increase far outpaces inflation, eating into workers’ earnings significantly.

As a result of these challenges, entrepreneurs and small business owners are increasingly turning to Affordable Care Act (ACA) plans for coverage. Half of all individuals purchasing coverage on the ACA marketplaces work for small businesses or are self-employed, a significant increase from previous years. However, the cost of ACA plans has risen due to the expiration of enhanced subsidies, making it more difficult for these individuals to afford coverage.

One notable figure in the fight against rising healthcare costs is Chris Deacon, a whistleblower who exposed misconduct in New Jersey’s state health plan. Despite her efforts to uncover overpayments and shortcomings in the system, Deacon was excluded from a major settlement involving employer health insurance. Her story highlights the challenges that employers face in navigating the complex and often opaque healthcare system.

Overall, the affordability of employer-sponsored health insurance is a pressing issue that affects millions of Americans. As costs continue to rise, it is crucial for policymakers, employers, and individuals to work together to find sustainable solutions that ensure access to quality healthcare for all. Share your own experiences and insights on this topic to contribute to the ongoing dialogue on healthcare affordability in the United States.