As a percentage of household incomes, the cost of private, job-based health coverage last year was more expensive in Arkansas than in all but two other states, according to a report scheduled for release today.
Employees in Arkansas paid an average of $388 a month, or $4,661 a year, for individual or family coverage last year, according to the report by The Commonwealth Fund, a New York City health research organization.
That was equivalent to 9.1% of the state's median annual household income of $51,320 for people under age 65.
Only Louisiana and Mississippi had higher average premiums when compared with those states' median household incomes.
The average premium in Louisiana was $419 a month, equivalent to 10% of that state's median income of $50,150.
In Mississippi, workers paid an average of $387 a month, or 9.7% of that state's median income of $47,800.
Craig Wilson, health policy director for the Arkansas Center for Health Improvement, said in an email that the cost of health care is lower in Arkansas than in other states because of Arkansas' low wages.
In 2018, for instance, Arkansans' median household income among people under age 65 was the fifth-lowest in the country, according to The Commonwealth Fund report.
But those low wages also mean "the cost burden for Arkansas families is greater," Wilson said.
He added that the increasing cost of coverage can have consequences for employees' health.
"As more and more Arkansans have to decide between health care and other essential living expenses like housing and food, the more likely it is they will not seek necessary care or forgo insurance coverage altogether," he said.
The report used income information from the U.S. Census Bureau's annual Current Population Survey and health plan data collected by the U.S. Department of Health and Human Services' Agency for Healthcare Research and Quality, which surveys about 40,000 business locations across the country each year.
The Commonwealth Fund found that, after slowing down for several years, annual growth in employer health coverage costs has started to increase.
In 2017 and last year, the cost paid by employers and employees for family coverage nationally increased an average of 5.1% a year, compared with an average annual increase of 3.1% in 2015 and 2016.
For individual coverage, the cost grew an average of 4.9% a year in 2017 and last year, compared with 2.3% in 2015 and 2016.
Employers have responded generally by shifting more costs to employees, both through higher premiums and deductibles, David Blumenthal, The Commonwealth Fund's president, said in a conference call with reporters.
As a result, in Arkansas and nationwide, employees' premiums have been increasing faster than incomes.
In 2008, for instance, the average premium for Arkansas employees amounted to 5.6% of the state's median household income for people under age 65.
Nationally, average employee premiums were equal to 5.1% of the U.S. median income that year.
By last year, average U.S. employee premiums had increased to 6.8% of household median incomes, with employees paying an average of $366 a month.
The lowest ratio of premiums to median income last year was in Washington state.
Employees there paid an average of $263 a month for individual or family coverage, equal to 4.1% of the state's median income of $77,100.
Blumenthal said employers are more likely to protect skilled, highly paid workers than low-wage workers from increases in health care costs.
"The nature of the market for workers is a very important factor in this equation," he said. "You don't want to be in a low-wage environment where there's an abundance of workers.
Randy Zook, chief executive of the Arkansas Sate Chamber of Commerce, said Arkansas' employers have openings for relatively high-wage jobs but have trouble filling them.
He said the state could do a better job of informing young people about the opportunities that are available and connecting them with the right training.
"A lot of people assume, 'If I go get a college degree, I'm golden,'" he said. "Well you've got to get the right degree."
Blumenthal added that employers are reaching a limit to the amount of health care costs they can shift to employees.
One example of that, he said, was the announcement last year that Amazon, Berkshire Hathaway and JPMorgan Chase would team up to explore ways of controlling health care costs.
Employers "have a real dilemma right now, and they are going to have to come up with some innovative solutions."
Metro on 11/21/2019