Investor Presentaiton
Island, employers have shifted a greater proportion of the costs of employer-based
health care to employees in the form of higher premium contributions and cost-
sharing. In 2001, Rhode Island workers' average premium contribution for family
coverage was $1,703, or 21 percent of the entire premium. This has since increased
to $6,216, or 28 percent of the entire premium, in 2021. In addition, the percent of
employees enrolled in a health insurance plan that has a deductible increased from
31.8% in 2003 to 94.6% in 2021. Over this same period the average annual deductible
for a family plan quadrupled from $885 to $3,662.9
As employers turn towards plans with large deductibles and higher cost-sharing to
manage the cost of providing health care to their workers, underinsurance - where
individuals who have medical coverage are still exposed to financial risk - is becoming
increasingly common. A survey of Rhode Islanders' insurance status, experience
getting care, and use of medical services showed that 28.1 percent of Rhode Islanders
were underinsured in 2022.10 On average, Rhode Islanders spend more than $2,500
a year out-of-pocket on health care, with some spending much more to obtain care
because they have coverage that requires far greater cost-sharing and/or they have
significant health care needs.11
As a result of rising premiums and cost sharing, an estimated 31 cents of every
additional dollar earned by Rhode Island families between 2017 and 2019 went to
health care, leaving fewer resources for other daily needs such as housing, education,
and savings (see Exhibit 1.2). In 2022, 14.9% of survey respondents had problems
paying medical bills, with some being unable to pay for necessities like food, heat or
rent, and others using up savings to pay for medical bills or incurring debt. Some even
had to file for bankruptcy (see Exhibit 1.3).
As a result of rising
premiums and cost
sharing, an estimated
31 cents of every
additional dollar earned
by Rhode Island families
between 2017 and
2019 went to health
care, leaving fewer
resources for other daily
needs such as housing,
education, and savings.
Exhibit 1.2: Allocation of the Increase in Monthly Compensation
Between 2017 and 2019 for a Median Income Rhode Island
Family with Health Insurance Through an Employer
17 Cents
State and Federal
31 Cents
Healthcare
Taxes
LA
О
52 Cents
Take Home
Source: OHIC analysis of AHRQ's MEPS-IC, the American Community Survey 1-year files, and the Current
Population Survey. Data represent Rhode Island families who obtain private health insurance through an employer.
8 Office of the Health Insurance Commissioner (OHIC) analysis of MEPS-IC for Rhode Island private-sector establishments that offer health insurance.
9 AHRQ, MEPS-IC.
10 The 2022 Health Information Survey categorizes individuals as underinsured if: (1) their out-of-pocket costs over the past 12 months, excluding premiums, for families with incomes of 200%
FPL or greater, was equal to at least 10% of household income; (2) their out-of-pocket costs over the past 12 months, excluding premiums, for families with incomes lowers than 200%
FPL, was equal to at least 5% of household income; or (3) their deductible was at least 5% of household income. See: HealthSource RI, 2022 Rhode Island Health Insurance Survey, accessed
March 27, 2023, https://healthsourceri.com/surveys-and-reports/.
11 HealthSource RI. Results include all policy holders, not just those with private insurance.
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Annual Report: Health Care Spending and Quality in Rhode IslandView entire presentation