Many families with private health insurance face significant health care cost burdens. As policymakers seek to mitigate costs through the extension of federal subsidies and other means, it is important to understand which families have the greatest challenges paying for care. 

In this report, we assess differences in health care affordability between families with employer-sponsored insurance (ESI) and those with private nongroup coverage obtained through or outside the health insurance Marketplaces. Our analysis draws on pooled 2016–19 Medical Expenditure Panel Survey data, focusing on the period before Congress introduced the enhanced Marketplace premium tax credits under the American Rescue Plan Act (ARPA) of 2021. We examine multiple affordability measures among nonelderly adults in families where every person had continuous full-year coverage through ESI or a nongroup plan. Our key findings include the following:

• Adults with nongroup coverage reported larger average per-person family out-of-pocket premiums ($2,912 versus $1,126) and health care costs ($1,010 versus $825) than adults with ESI. 
  • Nongroup enrollees were more than twice as likely as those with ESI to report paying at least 10 percent of family income toward health care costs (10.5 percent versus 3.8 percent).
  • Among low-income adults, 24.0 percent of those with nongroup coverage reported out-of-pocket health care costs exceeding 10 percent of income.
• More than 1 in 3 adults with nongroup coverage (36.4 percent) and over 1 in 5 adults with ESI (21.8 percent) reported they or a family member delayed getting or did not get medical care, dental care, or prescription drugs that they needed in the past 12 months because of the costs.
  • The difference in delayed and forgone care between families with ESI versus nongroup coverage was particularly large among those with incomes below 400 percent of the federal poverty level (41.7 percent versus 27.0 percent).
• Adults with nongroup coverage were more likely than those with ESI to report problems paying family medical bills in the past 12 months (10.2 percent versus 6.9 percent). 
  • Among those with incomes below 200 percent of the federal poverty level, nearly 1 in 7 adults with nongroup coverage or ESI (14.1 percent and 13.2 percent, respectively) reported problems paying medical bills.
• Though nongroup enrollees had lower average incomes and greater health needs than those with ESI, these differences in economic and health characteristics did not fully explain gaps in health care affordability. 
  • The higher prevalence of affordability challenges among nongroup enrollees may partially reflect their greater likelihood of having high-deductible health plans (44.6 percent versus 36.0 percent) and lower rates of dental coverage (24.4 percent versus 76.8 percent).

Over the next year, policymakers face key decisions about extending the enhanced Marketplace premium subsidies beyond 2025 and identifying other strategies for alleviating cost burdens. Members of Congress have advanced legislation to make the enhanced Marketplace subsidies permanent, and researchers have demonstrated that congressional action by the spring of 2025 would be needed to prevent an increase in premiums as insurers begin setting rates for 2026 (Levitis, Corlette, and O’Brien 2024). Our analysis finds that families with nongroup insurance faced significant affordability problems before ARPA, suggesting the expiration of the enhanced subsidies could exacerbate difficulties they may face in paying for coverage and care. Efforts to mitigate health costs for families with nongroup coverage are important components of a policy agenda for addressing the nation’s health care affordability challenges.