Medical care coverage

In 2023, a plan network was available to 99 percent of private industry workers participating in medical care plans. Coverage is considered in-network when plan administrators contract specified rates with health care providers, such as specialists, hospitals, and laboratories. Plan participants usually receive a discount for using services in-network. Services provided outside of the network typically carry higher costs to plan participants. Twenty-one percent of private industry workers had one plan network and 72 percent had two networks available.

Non-emergency services outside the network were available to 77 percent of private industry workers participating in medical care plans. For the remaining 23 percent of workers, non-emergency services were not available. That is, any non-emergency services received outside the network costs were the sole responsibility of plan participants. Among workers in different establishment sizes, non-emergency services outside the network were available to 74 percent of workers in establishments with 1 to 99 workers and 78 percent of workers in establishments with 500 workers or more. (See chart 1).

Medical care eligibility

In 2023, a service requirement (i.e., eligibility requirement) existed for 57 percent of private industry union workers participating in medical care plans. When this type of requirement is present, before workers are eligible to participate in the plan, they need to complete a specified period of time in the job. For 28 percent of these workers, the eligibility requirement was 1 month of service. Thirty-three percent of these workers did not have an eligibility requirement. For 9 percent of these workers, eligibility requirements could not be determined from the collected documentation.

A service requirement existed for 45 percent of private industry nonunion workers participating in medical care plans. For 21 percent of these workers, 1 month of service was required for eligibility. An eligibility requirement was not present for 38 percent of these workers. For the remaining 17 percent of workers, eligibility requirements could not be determined from the collected documentation. (See chart 2).

Coinsurance requirement for medical services

A coinsurance is a requirement that plan participants pay a percentage of medical cost. In 2023, coinsurance was required for 76 percent of private industry workers participating in medical care plans. The percentage of workers with coinsurance ranged from 68 percent for the Northeast census region to 80 percent for the South census region. A variable coinsurance was present for 82 percent of workers participating in medical care plans with coinsurance requirements. The median coinsurance was 60 percent for out-of-network services and 80 percent for in-network services. For the most generous coverage⁽¹⁾, the median coinsurance percentage was 85 percent. (See chart 1).

Out-of-pocket maximum for individual coverage

An out-of-pocket maximum is the annual dollar amount limit that plan participants are required to pay out-of-pocket, in addition to the plan deductible. In 2023, 89 percent of union workers and 99 percent of nonunion workers had an individual out-of-pocket maximum for private industry workers participating in medical care plans. The median amount was $2,500 for union and $2,800 for nonunion workers. The out-of-pocket maximum ranged from $1,000 at the 10^th percentile to $5,000 at the 90^th percentile for union workers and from $1,250 at the 10th percentile to $5,650 at the 90^th percentile for nonunion workers. (See chart 2).

Out-of-pocket maximum for family coverage

Among private industry workers in different average hourly wage categories, the out-of-pocket maximum for family coverage was 100 percent for workers in the lowest 10 percent category and 98 percent for workers in the highest 10 percent category in 2023. The out-of-pocket maximum median was $6,200 for the lowest 10 percent and $5,000 for the highest 10 percent. (See chart 3).

End note

⁽¹⁾ In instances where more than two tiers of benefits (networks) exist, which provide participants with options when selecting services, the most generous coverage refers to the network that provides the lowest out of pocket cost for services (deductible, copayment, or coinsurance) rendered.

Annual deductible

Many health care plans have a deductible. A deductible is a dollar amount that plan participants pay during the benefit period, usually a year, before the insurer starts to make payments for covered medical services. Plans may have individual and family deductibles. In 2023, 91 percent of private industry workers participating in medical care plans had an annual deductible. Of workers participating in medical care plans, 26 percent had a fixed annual individual deductible and 64 percent had a variable annual individual deductible. Among private industry groups, 48 percent of workers in the accommodation and food services industry had a fixed annual individual deductible and 47 percent had a variable annual individual deductible. For workers in the professional, scientific, and technical services industry, 15 percent had a fixed annual individual deductible and 70 percent had a variable annual individual deductible. (See chart 1).

Individual deductible

Most workers participating in medical care plans have either individual or family deductibles. In the case of individual deductibles, once plan participants meet the deductible amount, covered medical benefits begin. Some medical care plans have fixed deductibles while others have variable deductibles. In 2023, 26 percent of workers participating in individual medical care plans had fixed deductible amounts and 64 percent of workers had variable deductibles. In the case of variable deductibles, insurers may offer tiered networks and provide the insured participants with the lowest costs for using preferred providers. The insured participants may also receive services from other in-network providers.

The median individual deductible amount in 2023 was $1,500 for private industry workers participating in medical care plans. Among industries, the individual deductible amount was $1,000 for real estate and rental and leasing and $3,000 for accommodation and food services. (See chart 2).

In 2023, the most generous coverage⁽¹⁾ median variable deductible amount for private industry union workers was $1,500, the median in-network amount was $1,500, and the median out-of-network amount was $2,800 among workers participating in medical care plans. For nonunion workers, the most generous coverage median deductible amount was $1,000, the median in-network deductible was $1,500, and the median out-of-network amount was $3,000. (See chart 3).

Family deductible

In 2023, 90 percent of private industry workers participated in medical plans with a family deductible. For private industry workers, 26 percent had a fixed deductible for family coverage and the median amount was $3,300. A variable deductible for family coverage was required for 63 percent of workers and the most generous coverage median amount was $2,000. Among occupational groups, the in-network median family deductible was $3,000 for professional and related occupations and $4,000 for sales and related occupations, while the out-of-network median family deductible was $6,000, and $9,000 respectively. The most generous coverage for professional and related occupations was $2,000 and $5,000 for sales and related occupations. (See chart 4).

End note

⁽¹⁾ In instances where more than two tiers of benefits (networks) exist, which provide participants with options when selecting services, the most generous coverage refers to the network that provides the lowest out of pocket cost for services (deductible, copayment, or coinsurance) rendered.

High deductible health plans

High deductible health plans (HDHP) typically feature higher deductibles and lower insurance premiums than those of traditional health plans. These plans include catastrophic coverage to protect against large medical expenses, but hold the insured responsible for routine out-of-pocket expenses until the plan deductible is met.⁽¹⁾

In 2023, among private industry workers participating in medical care plans, 51 percent of all workers, 35 percent of union workers, and 54 percent of nonunion workers participated in HDHPs. For nonhigh deductible health plans, the participation rate was 48 percent for all workers, 65 percent for union workers, and 45 percent for nonunion workers. (See chart 1).

Among private industry workers that participated in HDHPs during 2023, the median annual individual deductible for all private industry workers was $2,500. The median amount for union workers was $2,000 and nonunion workers was $2,500. The 10th percentile annual individual deductible amounts for both private industry union and nonunion workers is $1,500. For union workers, the 90th percentile annual individual deductible amount is $4,000, and for nonunion workers the amount is $5,000. (See chart 2).

Tax-favored accounts

Health savings accounts (HSAs) are employee-owned portable accounts that use tax-exempt contributions to pay for medical expenses. HSAs are used in combination with employer-provided HDHPs with annual maximum limits on out-of-pocket and deductible expenses. Other features include the rollover of unused contributions from year to year and tax-free interest.

Similar to HSAs, Health Reimbursement Arrangements (HRAs) are tax-favored accounts that reimburse employees for qualified medical expenses. However, HRAs consist of funds set aside by employers only with no employee contributions. Employees receive tax-free reimbursements for qualified medical expenses up to a maximum dollar amount for a coverage period. An HRA may be offered with any qualified medical plan.

Among private industry workers participating in HDHPs, 52 percent of workers participated in plans with HSAs and 8 percent participated in plans with HRAs in 2023. For workers in the lowest 25 percent average wage category, 32 percent participated in plans with HSAs and 12 percent participated in plans with HRAs. Sixty-six percent participated in plans with HSAs and 7 percent participated in plans with HRAs among workers in the highest 25 percent average wage category. (See chart 3).

Nonhigh deductible health plans

Among private industry workers that participated in nonhigh deductible health plans in 2023, 82 percent of private industry workers, 69 percent of union workers and 84 percent of nonunion workers had an annual individual deductible. Eighteen percent of private industry workers, 31 percent of union workers and 16 percent of nonunion workers participated in plans without an annual individual deductible. (See chart 4).

End notes

⁽¹⁾ For more information on high deductible health plans, see the High deductible health plans factsheet.

Services provided

Estimates are available for types of coverage, including coinsurance and copayment for hospital room and board benefits, physician office visits, and specialist office visits. Among private industry workers who participated in medical care plans, 93 percent had coverage of hospital room and board, 100 percent had coverage of physician office visits, and 98 percent had coverage of specialist office visits in 2023.

The two types of limits on coverage are copayments and coinsurance. Copayments are predetermined dollar amounts that plan participants must pay when services are received before any remaining charges are paid by insurers when the deductible has been met. For hospital room and board benefits, the copayment may vary based on salary or length of stay.

Coinsurance is a form of medical cost sharing that requires a participant to pay a stated percentage of medical expenses after the deductible amount, if any, has been paid. After the deductible and coinsurance are paid, insurers are responsible for costs up to the allowable charges. Participants may be responsible for any charges in excess of what insurers determine to be "usual, customary, and reasonable." Coinsurance rates may differ between services received from an approved provider and those received from providers not on the approved list. In addition to overall coinsurance rates, rates may also differ for different types of services.

Hospital room and board

In 2023, 14 percent of union workers and 2 percent of nonunion workers had full coverage for hospital room and board benefits among private industry workers participating in medical care plans.  Eighty-two percent of union workers and 91 percent of nonunion workers had coverage with limits for hospital room and board benefits. (See chart 1).

In 2023, among private industry workers participating in medical care plans with hospital room and board coverage limits, 90 percent of workers had coverage with limits. Thirteen percent of all private industry workers were subject to copayment only and 74 percent were subject to coinsurance only. For production, transportation, and material moving workers, 75 percent were subject to coinsurance only and 11 percent were subject to copayment only. For natural resources, construction, and maintenance workers, 65 percent of workers were subject to coinsurance only and 15 percent were subject to copayment only. (See chart 2).

Physician office visits

Among private industry workers participating in medical care plans in 2023, 97 percent had physician office visit coverage limits. Sixty-two percent were subject to copayment only and 31 percent were subject to coinsurance only. Among service workers, 74 percent were subject to copayment only and 20 percent were subject to coinsurance only. Sixty percent of production, transportation, and material moving workers were subject to copayment only and 35 percent were subject to coinsurance only. (See chart 3).

Specialist office visits

Among private industry workers participating in medical care plans in 2023, 96 percent of workers had coverage limits for specialist office visits. Sixty-one percent were subject to copayment only and 33 percent were subject to coinsurance only. Among occupational groups, 74 percent of service occupational workers had copayment only and 19 percent had coinsurance only. For production, transportation, and material moving occupations, 57 percent had copayment only and 38 percent had coinsurance only for specialist office visits. (See chart 4).

Outpatient prescription drugs

Prescription drug plans provide coverage for outpatient prescription drugs, which include the following:⁽¹⁾

• Generic drugs: These are drugs not under any patents.
• Formulary drugs: These are both generic and brand-name drugs approved by the healthcare provider. Drugs not approved by the healthcare provider are nonformulary drugs, for which enrollees receive less generous benefits, such as a higher copayment per prescription.
• Mail-order drugs: These are drugs that can be ordered through the mail.
• Brand-name drugs: These are drugs that once were, or still are, under patents.

Among private industry workers participating in outpatient prescription drug plans in 2023, 100 percent had coverage of generic drugs and brand-name formulary drugs, 92 percent had coverage of brand-name nonformulary drugs, 86 percent had coverage of mail order drugs, and 43 percent were subject to an annual deductible. For workers in the lowest 25 percent average wage category, 100 percent had coverage of generic drugs and brand-name formulary drugs, 86 percent had coverage of brand-name nonformulary drugs, 80 percent had coverage of mail order drugs and 32 percent were subject to an annual deductible. For workers in the highest 25 percent average wage category, 100 percent had coverage of generic drugs and brand-name formulary drugs, 95 percent had coverage of brand-name nonformulary drugs, 89 percent had coverage of mail order drugs and 49 percent were subject to an annual deductible. (See chart 1).

In 2023, the median generic drug limits coverage for all private industry workers was $10 for those participating in outpatient prescription drug plans. Among private industry workers participating in outpatient prescription drug plans with brand-name drug on formulary limits coverage, the median copayment was $35 for all private industry workers and $40 for workers in the manufacturing, financial activities, and information industries. The median copayment for brand-name drugs not on formulary limits was $60 for all private industry workers participating in outpatient prescription drug plans with brand-name drug not on formulary coverage. The median copayment for workers in the other services industry was $55. (See chart 2).

Generic drug limits

Among workers that participated in outpatient prescription drug plans in 2023, 70 percent of private industry workers, 60 percent of union workers, and 71 percent of nonunion workers were subject to copayment. For private industry workers, 21 percent of all private industry workers, 28 percent of union workers, and 20 percent of nonunion workers were subject to a coinsurance.  Seven percent of all private industry workers, 11 percent of union workers and 6 percent of nonunion workers subject to a coinsurance had a minimum or maximum dollar amount apply. (See table 1).

Brand-name drugs on formulary

Among private industry workers that participated in outpatient prescription drug plans with brand-name formulary coverage, 61 percent of workers, 54 percent of union workers, and 63 percent of nonunion workers were subject to copayments in 2023. Thirty-three percent of private industry workers, 38 percent of union workers, and 32 percent of nonunion workers were subject to coinsurance. (See table 1).

Brand name drugs not on formulary

Among private industry workers participating in outpatient prescription drug plans with brand-name drugs not on formulary coverage, 60 percent of workers were subject to copayment and 35 percent were subject to coinsurance. For private industry union workers, 47 percent were subject to copayment and 45 percent were subject to coinsurance. For private industry nonunion workers, 61 percent were subject to copayment and 34 percent were subject to coinsurance. (See table 1).