American workers are being eroded by rising healthcare coverage

A new study suggests that the rising cost of healthcare insurance in the United States has become one of the main reasons for worker wages being eroded, and it is also an important factor leading to a slowdown in wage growth and increased income inequality over the past 30 years. High medical expenses have become a burden on American households and a major factor affecting insurance purchases and healthcare decisions. Concerns about these costs and unexpected medical expenses are increasingly becoming one of the most concerning financial issues for adults and their families. The latest public opinion survey shows that reducing the self-sufficiency of medical expenses has become the top priority for public healthcare.

Firstly, many American adults find it difficult to afford medical expenses. Although low-income and uninsured individuals are most affected, even those with health insurance and higher incomes cannot avoid high medical expenses. About half of American adults say they find it difficult to pay for medical expenses. Among the population under 65 years old, those who are not insured are more unable to afford medical expenses compared to adults with health insurance.

Darius Mozafarian, director of the Institute of Food and Medicine at Friedman College, a cardiologist, and senior author of this study, pointed out that "employers invest more money in medical insurance instead of paying it as wages to employees. The implicit cost of increasing medical insurance has a particularly serious impact on people of color and low wage workers, leading to slower wage growth, increased insurance burden, and increased income inequality."

It is worth noting that the researchers examined the national medical insurance family plan data covering individuals annually from 1988 to 2019 in their study, combining data from employer health and welfare surveys and consumer expenditure surveys conducted by the Bureau of Labor Statistics. They combined these data with individual household income data from the current population survey conducted by the Census Bureau. Data shows that in 1988, the average cost of medical insurance accounted for 7.9% of the total wages (wages plus medical insurance premiums) of workers. By 2019, this proportion had skyrocketed to 17.7%. If the proportion of medical insurance costs remains unchanged, the average annual household salary may increase by $8774 by 2019.

Secondly, the proportion of wage losses in black and Hispanic families is higher than that in white families. By 2019, the proportion of medical insurance expenses to wages for Asian households was 18.5%, 19.2% for black households, 19.8% for Hispanic households, and only 13.8% for white households. Low income workers are also severely impacted by this gap. In 2019, the proportion of medical insurance expenses to salary reached 28.5% of households in the top 20% of income, while only 3.9% of households in the top 95% of income.

In addition, for many American adults, prescription drugs are a part of daily care. More than a quarter of adults reported that paying for prescription drugs was "somewhat difficult" or "very difficult". For adults taking four or more prescription drugs and families with an annual income of less than $40000, purchasing prescription drugs is particularly difficult. Compared to white adults, black and Hispanic adults have a higher proportion of difficulty paying for prescription drugs.

Over the years, the continuous increase in healthcare insurance costs has deprived a large number of Americans of their income and exacerbated racial disparities. The increase in premium costs has led to significant wage losses, which has had a real impact on American households, especially those facing economic difficulties. For low paying workers, the situation is even worse, as insurance costs continue to rise and wages continue to be suppressed, which may lead to increasing financial insecurity.