A new report from the Commonwealth Fund analyzes state trends in private employer-sponsored insurance from 2003 to 2011 for the under-65 population. Right now there is a lot of attention on the federal deficit and Medicare. What is not receiving a lot of attention is that the costs of private insurance spending per person have been rising faster than Medicare spending per person and are projected to continue. Findings from the new report on ESI particularly impact moderate- and low-income families:

• ESI premium rose 62% in the U.S. from 2003-2011. In 2011, the average premium for ESI family coverage reached $15,022. Average premiums in the highest-cost states were around 30% more than premiums in the lowest-cost states.
• Premiums have increased three times faster than wages. Total premiums relative to income are up in all states for middle-income families. In 2003, there was just one state where the annual premium was at least 20% of median household income. By 2011, there were 35 states.
• Premium growth is consuming resources that employers could have used for benefit or wage increases and hiring additional workers. 80% of the population now lives in a state where total premiums are equal to or more than 20% of median incomes.
• In lower-income states, the rising cost of ESI is particularly problematic: many states with premiums above the national average have household incomes below the national average.
• While workers are paying more for ESI, their premiums are buying them less. In 34 states, deductibles increased by over 100% over the time period. In 2003, 52% of workers had a deductible. In 2011, it was up to 78% of workers. The shift of health care costs to workers has led to higher out-of-pocket costs, in addition to premium increases.

Rising health care costs and stagnant incomes have pushed more families into poverty. As a result of the recession, the percentage of people with ESI dropped from 58.9% to 55.3% from 2008 to 2010. An estimated 9 million adults between 19-64 lost a job with health benefits and became uninsured. As Say Ahhh! readers know, a new alternative poverty measure from the Census Bureau finds that 16% of the population would have been counted as poor, compared to 12.7%, when medical spending is factored in to the calculation.

The report, which includes state-by-state data, finds that full implementation of the ACA can moderate costs and improve coverage—premiums are already rising slower than they were before enactment of the ACA—but, further reform is needed to address broader issues of cost and quality in the health care system. Starting in 2014, the authors expect that the ACA could help slow premium growth, make premiums more affordable, provide financial protection for the insured and help families maintain coverage.