INTRODUCTION TO US

HEALTHCARE SYSTEM

TRENDS IN PREMIUMS AND

COST SHARING AND ITS
REASONS AND
IMPLICATIONS Group 2

Archi Jain
Kajol Mittal
Kanika Choudhary
Prachiti Shetye
Shruti Singh
Sumita Maity
 PRIVATE HEALTH INSURANCE
Predominant source of health insurance coverage in the United States. In 2020, private health
insurance expenditures accounted for $1,151 billion (29.3% of overall HCE)

Employer-Sponsored Insurance

• covered an estimated 177 million individuals (54.4%

of the U.S. population) - 2020

Nongroup market (commonly referred to as the

individual market)

• Includes plans directly purchased from an insurer

both on and off health insurance exchanges)

• Covered an estimated 34 million individuals (10.5%

of the U.S. population) - 2020
 PREMIUM TRENDS AND COST SHARING
Employer health insurance coverage remains the backbone of health insurance in the United States.

But how much are workers spending on

premiums and what
is the size of their deductibles?

Premium contributions and

deductibles in employer health
plans accounted for 11.6 percent of
median household income in 2020,
up from 9.1 percent a decade
earlier
 In 37 states, premium
contributions and
deductibles amounted to 10
percent or more of median
income in 2020, up from 10
states in 2010.
Over the last decade, health costs incurred by
families covered by large employers – including
premium contributions and out-of-pocket
spending on health services – has increased 67%
from $4,617 to $7,726.

• Deductibles accounted for 26% of cost sharing

payments in 2007, rising to more than half in
2017. Conversely, copayments accounted for
46% of cost sharing payments in 2007, falling
to 19% in 2017

• This reflects a trend of health insurance

providers relying less on copayments, and more
on deductibles and coinsurance.
REASONS for increase in
premium and cost sharing

• Competition among providers: spending

and the overutilization of expensive
technology.

• Organizations are incentivized to Private Insurance companies not meeting the

purchase more expensive health ACA’s medical loss ratio threshold
insurance plans: tax-exempt to the
employee, thus reducing their after-tax
cost of coverage.
Higher loss ratios
• Shift towards the HDHP: incentive for
patients to do comparison shopping for
high-quality, low-cost medical services could lead to steeper premium increases in the
following year, as some insurers try to regain
higher margins.
IMPLICATIONS

• Every 10 percent increase in health insurance costs reduces the chances of employment by 1.6
percent.

• Rising health costs by converting full-time jobs to part-time positions, most of which do not include
health benefits. Thus leaving employees uninsured

• Employees may also shift to a less generous plans, such as one that only covers catastrophic illness.

• Between 2009 and 2020, the amount of medical debt in collections overtook that of nonmedical debt.

• People with employer coverage who had problems paying medical bills or were paying off medical debt,
40% received a lower credit score because of their medical bills and 35 percent had used up most or all
their savings to pay their bills.

• HDHP deter patients from seeking needed care and add to financial burdens, particularly on low-income
families and those with chronic illnesses. 
 REFERENCES

• CRS Reports. (n.d.). CRS Reports; crsreports.congress.gov. Retrieved July 29, 2022
• Effects of Rising Health Insurance Premiums | NBER. (n.d.).
• Tracking the Rise in Premium Contributions and Cost-Sharing for Families with Large Employer Coverage - Peterson-
KFF Health System Tracker.” Peterson-KFF Health System Tracker, www.healthsystemtracker.org, 14 Aug. 2019

• State Trends in Employer Premiums and Deductibles, 2010–2020 | Commonwealth Fund. (2022, January 12). State Trends in
Employer Premiums and Deductibles, 2010–2020 | Commonwealth Fund;

• Private Insurers Expect to Pay $1 Billion in Rebates to Consumers This Year for Setting Premiums Too High Relative to
Medical Costs. (2022, June 1). KFF;
THANK
YOU!