Lewis & Ellis, LLC

Low-income workers seeing increased cost on health insurance

Health Care and Health Insurance
by Jacqueline Lee
Low-income workers seeing increased cost on health insurance
Low-income workers seeing increased cost on health insurance

Across the country, workers of all stripes have likely seen their health insurance costs increase substantially over the last decade or more, but the problems that arise from that issue are not spread uniformly. In fact, it now seems that the people who make the least money might be the ones getting squeezed the most when health care costs rise.

Companies with a large percentage of their employees that fall into the low-income demographic (defined as those with at least 35 percent of the worker base making less than $23,000 annually) are tending to put a greater burden on those people specifically when it comes to their health insurance costs, according to a report from the Wall Street Journal. While many of those companies don't offer those workers health insurance options at all, those that do so tend to charge far more to those people than others, at least in terms of the overall portion of their salaries.

For instance, the latest data suggests that people who work for companies that offer low wages as part of their business model pay an average of $6,427 for family health insurance, compared to just $4,693 for companies that pay their workers more, the report said. That's an increase of nearly 37 percent. And these are people who can ill afford the additional cost; if a person making $25,000 annually has to pay even $6,000 to cover their family's health insurance, that's a far more significant portion (24 percent) than a worker making $35,000 who pays $5,000 annually (14.3 percent) for similar coverage.

Another issue for low-income workers
On top of that concern, there's also the fact that the Patient Protection and Affordable Care Act can't really help these people, the report said. Because they are being offered coverage - at any cost - they cannot obtain tax credits to help them buy lower-cost insurance through the exchanges, and may therefore end up going without. Experts say there may come a time at which employers with a large number of low-wage workers simply stop offering them those plans, so that they can search the exchanges for a better deal, but that certainly hasn't happened en masse yet.

For these reasons, it might be wise for health insurers to do more to potentially reach low-income workers to offer them another alternative that may carry a better ongoing cost to meet their unique financial and medical needs.



Consultants to Contact