A Clearer Picture of Health Care Affordability by Income Level
The Peterson‑KFF Health System Tracker’s June 30, 2025 analysis, based on the 2024 Current Population Survey, reveals substantial differences in what families with employer-sponsored insurance pay toward health care relative to their income.
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Households with incomes at or below 199% of the federal poverty level spend an average of 9.6% of their family income on insurance premiums and out-of-pocket medical expenses.
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Families earning between 200% and 399% of the poverty level allocate 6.2% of income to these costs.
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Households at or above 400% of poverty spend approximately 3.4% of their income on premiums and care.
Of that total share, most is directed toward premium contributions (about 2.4%) and the remainder toward deductibles and copayments (about 1.4%)—resulting in average healthcare spending near 4% of income overall.
Income and Health Status—A Double Burden
Families with members in fair or poor health face additional strain: those in the 200–399% income bracket with poorer health spend around 8.5% of their income on premiums and care, versus 6.0% for families in better health.
Why This Matters
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Lower-income families bear a disproportionately higher financial burden for both premiums and care, limiting access and potentially discouraging use of needed services.
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While employer-based insurance remains the most common form of coverage, rising costs and shrinking affordability thresholds continue to press middle- and low-income groups.
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Recent KFF data show average premium increases of 24% in the past five years, even while deductibles remain persistent, deepening affordability pressure.
How American Exchange Can Help
For organizations seeking to alleviate cost burdens and improve benefit design:
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Cost modeling: We simulate family-level expense impacts based on your plan structure, highlighting how out-of-pocket and deductible shifts affect different income cohorts.
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Benefit optimization: We design tiered plan offerings or consumer-driven options (e.g. HSAs) to reduce the relative share of income spent by lower-earning employees.
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Communication & enrollment support: We help target education campaigns for family members or employees in poorer health who are at higher risk of catastrophic costs.
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Equity assessments: We review plan offerings and contribution designs to assess fairness and accessibility for lower-income workers.
Ready to improve health coverage affordability across income levels? Visit American Exchange’s demo page to schedule a personalized walkthrough and explore tailored solutions.
Source:
“How affordability of health care varies by income among people with employer-based coverage,” Peterson‑KFF Health System Tracker, June 30, 2025.
