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Implosion of Commercial Health Insurance

Commercial health insurance, on a decades-long decline in affordability, dipped to a new low. Family insurance is unaffordable at small firms, children with commercial insurance are inadequately covered, and three-quarters of consumers can’t promptly pay medical bills.

December 7, 2023

Family health Insurance Is No Longer Affordable Through Small Employers
Nov 28, 2023
By Drew Altman

One thing that really jumped out from our 25th annual KFF employer health benefit survey: Small employers no longer have affordable coverage for workers with families.

Workers employed by small firms – those with fewer than two hundred employees – would need to pay $8,334 on average towards the premiums each year for family coverage. But enrolling a family at these firms can often be much more – a quarter of covered workers at small firms must pay $12,000 annually or more to enroll in family coverage.

But that doesn’t include what workers pay for deductibles or other out-of-pocket costs which are also typically higher at small firms. 57% have to pay $3000 or more before at least one member of the family meets the deductible and the plan starts covering most services. For 35% of covered workers at small firms, the deductible is at least $5000.

The bottom line: For many of the almost 50 million people working for the 3.2 million smaller companies in America, family coverage is no longer affordable. It is likely to be prohibitive for the really small companies, the pizza shop, the dry cleaners, or the bakery. Salaries at firms of less than 200 employees are $44,600 on average compared to $63,200 for workers at larger firms.

Between two-in-ten and three-in-ten lower income workers with employer coverage reported problems paying their medical bills, or that they could not pay them at all, in the last year. It’s logical that affordability challenges are always much worse for people who are chronically ill or who have major illnesses and need more care, but that’s also the opposite of how a health system should work.

Study finds high rates of inadequate health insurance coverage for commercially insured children
Academic article:
Consistency and Adequacy of Public and Commercial Health Insurance for US Children, 2016 to 2021
Columbia University Mailman School of Public Health
Nov 28, 2023
By Jamie R Daw et al.

1 in 5 children in the U.S. have inadequate health insurance, i.e. insurance that either has unreasonable out-of-pocket costs or doesn’t have benefits that meets the child’s medical needs.

Inadequate insurance is particularly high among kids with commercial insurance (approximately 1 in 3 commercially insured vs. 1 in 10 publicly insured kids).

Survey reveals 72% of consumers unable to pay health care bills immediately
Medical Economics
Nov 29, 2023
By Todd Shryock

A survey commissioned by AccessOne found that 72% of consumers find themselves unable or unwilling to pay their health care bills immediately.

Nearly half of those surveyed (48%) have taken drastic measures to curb expenses, including postponing essential care and forgoing prescription medications.

The survey also found that almost a third of respondents expressed no confidence whatsoever in their ability to settle a medical bill exceeding $500. 32% turn to personal credit cards, exacerbating their financial burden.

Comment by: Don McCanne

Those who believe that the Affordable Care Act should work well for all of us, if only we take advantage of what it has to offer, should be paying more attention to what is going on.

These three new sources show us that employer-sponsored plans are still leaving health care unaffordable for employees of small businesses, but that is now extending into larger businesses as well.

Commercial health insurance is leaving far too many children inadequately covered, which certainly exposes the falsehood that our private plans are working well for those who can afford them.

In spite of our various insurance programs, supposedly made universal by Obamacare, health care consumers are facing ever greater health care debt that they are no longer able to manage and causes them to forgo further essential care.

Note that these reports deal with only the most fundamental function of health insurance: paying medical bills. We are now also being inundated with manipulations that are designed to move our health care dollars away from patient care and to wealth creation for the billionaire investors that are taking away our choices in health care.


Time for an equitable, publicly funded and publicly administered health care system that will provide each of us with affordable care, care that we need, when we need it:  Single Payer!

About the Commentator, Don McCanne

Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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