Coverage is shrinking, cost-sharing is rising, and primary care use is falling

What a decade of employer-coverage data means for value-based networks, and the case for a first-dollar primary care layer.

The argument in brief

Three trends in the employer-sponsored insurance market have moved in the same direction for more than a decade, and together they reshape the environment in which primary care practices and value-based networks operate. Employer-sponsored coverage is shrinking, most sharply among the small employers that make up the bulk of the commercial market. For the workers who remain covered, the front end of the benefit has shifted onto the member through steadily rising deductibles. And as members have taken on more first-dollar exposure, primary care utilization among the commercially insured has fallen, with the decline concentrated in exactly the problem-based and chronic-care visits that tend to prevent more expensive care downstream.

We do not read this as a story about waste being wrung out of the system. The best available evidence indicates that members facing higher cost-sharing reduce necessary care along with discretionary care, and that the effect lands hardest on younger, healthier, and lower-income members — the very populations whose early disengagement from primary care most often resurfaces later as avoidable cost. For an organization bearing risk on those lives, that is not a neutral development. What follows lays out the data behind each of the three trends, is candid about what the evidence does and does not establish, and closes with the implication we find most actionable: a first-dollar primary care layer that removes the per-visit deductible precisely where it does the most harm.

Employer coverage is contracting, led by small firms

The long-run decline in employer-sponsored coverage is overwhelmingly a small-group story. Among large firms, the share offering health benefits has held above 95 percent for two decades. Among small employers it has steadily eroded: roughly 47 percent of small employers offered coverage in 2002, compared with about 30 percent in 2023 (Medical Expenditure Panel Survey Insurance Component, via Health Affairs, 2025). This is not a settled or historical trend. In the most recent Kaiser Family Foundation data, the share of firms with ten or more workers offering health benefits fell from 68 percent in 2020 to 61 percent in 2025 (KFF Employer Health Benefits Survey, 2025), so the contraction is continuing even within the last five years.

For those who keep coverage, the front end has shifted to members

Among workers who do retain employer coverage, the benefit increasingly protects against catastrophic expense while leaving routine and chronic care behind a deductible. In 2025 the average annual premium reached $9,325 for single coverage and $26,993 for family coverage, with covered workers contributing an average of $6,850 toward family premiums (KFF Employer Health Benefits Survey, 2025). The more consequential shift for primary care, however, is the deductible. The average general annual deductible for single coverage rose to $1,886 in 2025, an increase of about 43 percent over the past decade and 17 percent over the past five years.

The distribution matters as much as the average. Thirty-four percent of covered workers are now in a plan with a single-coverage deductible of at least $2,000, a figure that has risen roughly 77 percent over the past decade. The exposure is heaviest precisely where the small-group erosion is also concentrated: at firms with fewer than 200 workers, 53 percent of covered workers face a deductible of at least $2,000, and the average single deductible at small firms is $2,631, compared with $1,670 at large firms. In practical terms, a growing share of insured members must now pay something approaching out-of-pocket retail prices for an ordinary primary care visit until a deductible they may never reach is satisfied.

Predictable result: less primary care, concentrated where it matters

Primary care visits among commercially insured adults fell from 169.5 to 134.3 per 100 member-years between 2008 and 2016 — a decline of nearly 25 percent — while the share of adults with no primary care visit at all in a given year rose from 38.1 percent to 46.4 percent.

When the price of a primary care visit rises at the point of care, members respond, and the response has been measured. In the most rigorous claims-based study of the question, the decline above was steepest among the youngest adults, those without chronic conditions, and people in the lowest-income areas (Ganguli and colleagues, Annals of Internal Medicine, 2020).

The most revealing pattern in that study is the divergence between visit types. Visits tied to a health problem fell 30.5 percent over the period, yet preventive visits rose 40.6 percent. The difference tracks cost almost exactly. Preventive visits are largely free to the member under the Affordable Care Act, while the share of problem-based primary care visits subject to a deductible jumped from under 10 percent in 2008 to more than 25 percent in 2016, and the out-of-pocket cost of a problem-based visit rose about 31.5 percent. The visits that collapsed were the ones newly exposed to cost-sharing; the visits that grew were the ones the member could still obtain for free. This is close to a natural experiment, and it dismantles the common assumption that because preventive care is free, deductibles do not deter primary care. The deductible does not bite on the annual physical. It bites on the sick visit, the follow-up, and the chronic-disease management visit — the care most capable of keeping a member out of the emergency department.

The direction of that relationship is reinforced by the broader cost-sharing literature, which can isolate causation more cleanly because it observes members before and after they are moved into high-deductible plans. A systematic review of methodologically rigorous studies found that high-deductible plans reduced office visits in six of eleven studies and preventive care in seven of twelve, cutting both appropriate and inappropriate care, with evidence of reduced medication adherence (Agarwal and colleagues, Health Affairs, 2017). This is consistent with the foundational finding of the RAND Health Insurance Experiment: higher cost-sharing reduces necessary care along with unnecessary care rather than surgically removing only waste. Exposure to these designs has grown over the same period, with the share of employer-covered adults enrolled in high-deductible plans rising from 26.3 percent in 2011 to 39.3 percent in 2016.

The pattern is current, not merely historical. In 2025, roughly 36 percent of adults reported skipping or postponing needed care because of cost, and about 37 percent of insured adults reported going without needed care for the same reason, with nearly one in five saying their health worsened as a result (KFF Health Tracking Poll, 2025). A 2025 survey of insured adults, most of them with employer coverage, found that 38 percent had delayed or skipped care due to cost, up from 27 percent in 2023, and that 42 percent of those who deferred care said their condition got worse. The Commonwealth Fund has placed the share of working-age adults who struggle to afford care, even while insured, at roughly half.

What the evidence does and does not establish

Intellectual honesty requires drawing the claim carefully, because the decline in primary care is not attributable to cost-sharing alone. The authors of the central study identify three drivers, not one: a real or perceived reduction in visit need, financial deterrents, and substitution toward urgent care, retail clinics, and telehealth. Visits to those alternative venues rose nearly 47 percent over the study period, offsetting roughly a quarter of the primary care decline, and the underlying claims data did not capture non-billed interactions such as portal messages or the growing volume of visits delivered by nurse practitioners and physician assistants. Some portion of the measured decline therefore reflects care migrating to channels that claims do not see, rather than care forgone outright.

The survey estimates of deferred care should also be read with their instruments in mind. National Health Interview Survey data put the share of insured adults delaying or forgoing medical care due to cost at about 8 percent in 2024 (Peterson-KFF Health System Tracker), an order of magnitude below the 36 to 38 percent figures from issue-focused polls. The spread is driven largely by question wording and framing, and we cite the more conservative anchors alongside the more dramatic ones for that reason. The defensible claim, and the one we make, is this: primary care use among the commercially insured fell over the past decade; the decline concentrated in the cost-exposed problem and chronic visits while free preventive visits rose; and a consistent body of cost-sharing evidence shows that higher member out-of-pocket cost independently suppresses primary care use, including necessary care, with the heaviest effect on younger and lower-income members. We do not claim that deductibles alone caused the full decline, and we would treat anyone who did with appropriate skepticism.

Implications for a value-based network

For an organization that accepts risk on a population through value-based care contracts with insurers, the front-end disengagement documented above is not a source of savings. It is a deferral. Care that a member does not seek today because of a deductible does not disappear; it tends to reappear later, often in a higher-acuity and higher-cost setting that the network is at risk for. The members most likely to defer — the young, the healthy, and the lower-income — are also the members for whom a small, timely primary care investment yields the most avoided downstream cost. A benefit design that quietly discourages the cheapest and most preventive form of care is therefore working against the economics of risk, however well it controls premium in the near term.

Higher deductibles are a headwind to timely primary care. They shift care to higher-cost modalities and reduce the possibility of primary care winning in value-based contracts.

This is the gap a direct primary care layer is built to close, and it is important to know how it interacts with value-based care, because that interaction is frequently misunderstood. A direct primary care membership does not ask a practice to stand up a consumer business or market to patients, and it is not a cash-pay retail product that pulls members out of the arrangements that feed value-based panels. In the model we operate, employers sponsor membership, members are assigned to the participating practice, and the practice is paid from the first day, with no acquisition cost and no new business line to build. The effect on the panel is additive revenue rather than displaced volume. We would note honestly that whether a given member also lands in a specific value-based attribution bucket depends on that member’s underlying coverage and the network’s contracts, and we would map that concretely against your agreements rather than assert an answer in the abstract. The general point holds regardless: a first-dollar primary care layer complements value-based goals rather than competing with them, by restoring access to the exact visits that the evidence shows cost-sharing suppresses.

Direct primary care as the structural response

PCP4Me is a direct primary care membership platform built for the Western North Carolina market. An employer pays a flat monthly membership for each covered employee, and that membership covers unlimited primary care access with no co-pays, no deductible, and no cost at the point of care. Placed against the data above, the design is deliberately aimed at the failure mode the evidence illuminates. Where rising deductibles have made the problem-based and chronic-care visit something a member hesitates to seek, a first-dollar membership removes the per-visit decision entirely. Where small-employer coverage is eroding under premium pressure, an affordable, predictable membership gives an employer a way to preserve real primary care access for its workforce. And where a network carries risk, the layer functions as a protective front end that keeps members connected to a primary care relationship rather than to an emergency department.

None of this requires a leap of faith about the underlying problem, which is well documented — only a decision about whether to address it structurally. We would welcome the chance to walk through how a direct primary care layer would map onto your specific panels and contracts, including the populations where the cost-avoidance case is strongest, and to model the interaction with your existing value-based arrangements using real numbers rather than the market averages cited here.

References

Kaiser Family Foundation. 2025 Employer Health Benefits Survey. Premiums, worker contributions, deductibles, plan distribution, and firm offer rates.
Medical Expenditure Panel Survey, Insurance Component, as analyzed in Health Affairs Forefront, “Understanding the Long-Term Decline of the Small-Group Health Insurance Market,” January 2025.
Ganguli I, Shi Z, Orav EJ, Rao A, Ray KN, Mehrotra A. Declining Use of Primary Care Among Commercially Insured Adults in the United States, 2008 to 2016. Annals of Internal Medicine, 2020.
Agarwal R, Mazurenko O, Menachemi N. High-Deductible Health Plans Reduce Health Care Cost and Utilization, Including Use of Needed Preventive Services. Health Affairs, 2017.
RAND Health Insurance Experiment, summarized in the Health Affairs Health Policy Brief on High-Deductible Health Plans.
Centers for Disease Control and Prevention. Enrollment in high-deductible health plans among adults with employer coverage, 2011 to 2016.
Kaiser Family Foundation. Health Tracking Poll, 2025. Adults skipping or postponing needed care due to cost.
Imagine360 survey of insured adults, 2025, reported in Medical Economics and Patient Care Online.
Commonwealth Fund. Affordability of care among working-age adults with insurance, 2023.
Peterson-KFF Health System Tracker. How does cost affect access to healthcare? National Health Interview Survey data through 2024.