Most Underinsured Covered by Employer Health Plans, Survey Finds

Nearly one-quarter of working-age Americans were underinsured in 2023, with 66% of those individuals covered by an employer-sponsored health plan, according to new survey data.

More than half of Americans receive insurance through their employer. The findings released Thursday by The Commonwealth Fund reflect how rising health-care costs are impacting employer plans, where high inflation and the need for more medical care are driving increases in premiums and out-of-pocket costs.

The report from the health-care-focused think tank did not break down whether the underinsured—defined by the cost of their medical expenses in relation to their income—were enrolled in fully insured or self-insured employer plans.

Just 14% of underinsured respondents were covered by an Affordable Care Act plan, by comparison, while 11% were covered by Medicaid and 6% were covered by Medicare.

Fifty-seven percent of underinsured respondents reported skipping necessary medical care in the past year, Commonwealth found. Those decisions had downstream effects—41% of those who skipped care said their health worsened because of it.

Delaying care affected patients with a number of chronic health conditions. Around one-third of those foregoing treatment had disorders like asthma, diabetes, heart failure, or mental health issues.

Not all those skipping care for cost reasons were considered underinsured, which author and Commonwealth senior scholar Sara Collins attributed to other barriers not captured by the survey, like cost-sharing.

“That could easily affect people’s ability or desire to get health care if they have potentially high out-of-pocket costs,” she said.

The survey results were based on responses from a nationally representative sample of more than 8,000 people collected between March and June 2024.

Participants in the biennial survey were considered “underinsured” if their out-of-pocket costs—excluding premiums—were at least 10% of their income, or 5% if they made less than 200% of the federal poverty level. Participants were also considered underinsured if their deductibles were at least 5% of their income.

Medical Debt

People with employer-sponsored coverage were also not immune from medical debt.

Twenty-nine percent of respondents with medical debt had insurance through their employer. The problem affected individuals with incomes ranging from below 200% percent of the federal poverty level to those making more than 400% of the threshold.

The leading cause of medical debt was hospital care, followed by doctor visits, dental care, and emergency care.

The Commonwealth Fund suggested adjusting premiums and out-of-pocket costs in relation to income to alleviate affordability problems in the employer market. Only 10% of employers with 200 employees or more had policies to tailor premiums to low-wage workers in 2022, according to the Kaiser Family Foundation. Just 5% percent had policies to reduce cost-sharing.

The think tank also recommended Congress extend enhanced premium subsidies on the ACA exchanges and adopt more strategies to address medical debt, like the Biden administration’s attempts to keep medical debt off of credit reports.