Employer-sponsored health insurance is becoming more expensive in the United States, new data shows.
by Kaiser Family Foundation (KFF) 25th Annual Employer Health Benefits SurveyAs of July 2023, the average annual premium for employer-sponsored health insurance is $8,435 for individual coverage and $23,968 for family coverage, each an increase of 7% compared to last year.
Workers also contribute more to insurance premiums. In 1999, workers contributed $318 (14.4%) to the average annual premium of $2,196 for individual coverage. In 2023, worker contributions amounted to $1,401 of the total $8,435, or 16.6% of the total premium.
“I think this shows that there is an ongoing burden on employees and employers in terms of providing health insurance to employees and being able to afford that insurance. ,” said Andrea Ducasse, Vice President of Health Policy. “This is kind of intolerable,” he told Yahoo Finance at the Center for American Progress.
What is driving up costs?
Health care affordability remains a major issue across the United States.
Ann October 2023 survey A Commonwealth Fund study found that in the past year, 38% of U.S. adults have postponed or skipped purchasing medical care or prescription drugs because they couldn’t afford them, including those provided by their employer. Includes 54% of insured adults.
“I think a lot of the cost-sharing provisions that are mandated in employer-sponsored health plans, even for working people, especially low-wage workers, create real affordability issues.” [for] What is the ability to actually take advantage of this plan?” Matthew Rae, associate director of the KFF Healthcare Marketplace Project, told Yahoo Finance.
Ducasse explained that health insurance companies determine premiums based on how much a particular insured person is expected to spend. She added that healthcare utilization and the cost of that healthcare are two major factors.
Inflation has subsided in recent months, but nearly two-thirds of working-age adults report that price inflation has had some impact on their family’s healthcare costs in the past year, according to a Commonwealth Fund survey. 60% of these include people in the following situations: Employer Sponsored Coverage. Of that 60%, those with incomes below 200% of the federal poverty level reported suffering the most from inflation and health care costs.
Ray speculated that some of the higher premiums may be due to new treatments that cost more, as well as increased use of medical services that people have been shunning during the pandemic. .
He added: “The healthcare market is becoming increasingly consolidated, and healthcare providers have the power to capture higher prices.” “That also leads to higher premiums over time.”
“The labor market is really important here.”
Ray also pointed out that a tight labor market is contributing to higher premium costs, as employers want to ensure they offer benefits that attract talent.
“Having more coverage, having a wider choice of providers, and keeping cost-sharing low, I think all of those things are leading to higher premiums,” he said, adding that employers are increasing the cost of benefits. He pointed out that they are becoming more selective in their reductions. “The labor market is really important here.”
While premiums are still on the rise, growth in deductibles, the amount individuals pay for covered medical services before their insurance plan begins paying, has slowed in recent years. The average deductible for a single policy in 2023 was $1,735, an increase of just 10% compared to five years ago (53% increase compared to 2013).
The KFF study says, “This relatively low growth may reflect employer concerns about whether workers can afford higher out-of-pocket costs, especially for lower-wage workers. “There is,” he said, adding: The insurance they offer is very attractive at a time when unemployment is low and competition for the workforce is high. ”
A KFF study found that 90% of U.S. workers have a deductible, compared to 55% in 2006. Ray said this highlights the increasing complexity of cost burdens over the years.
The survey found that 25% of employers with 50 or more employees believe their employees have a “high” level of concern about affordability, and 33% believe their employees have a “high” level of concern about affordability. We consider them to have a “moderate” level of concern.
“Insurance is becoming very unaffordable for people, and it’s becoming increasingly difficult for employers to provide coverage,” Ducasse said. “And there’s a lot of work to be done to reduce health care costs.”
Adriana Belmonte is a reporter and editor covering politics and health policy at Yahoo Finance. You can follow her on Twitter @adrianambells Please contact [email protected].
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