The cost of health insurance rose this year by the largest amount since 2011, as inflation continues to impact all corners of the U.S. economy.
A 7 percent increase in the cost of an employer-sponsored family plan brought the average premium to nearly $24,000, according to an annual survey. questionnaire by nonprofit healthcare research organization KFF.
And employees have been paying an increasing percentage of that premium themselves over the past three years, up to an average of about 27.5 percent this year.
They paid an average of $6,575 for their share in 2023, about 8 percent more than last year. That’s nearly double the rate of inflation, according to data from the Bureau of Labor Statistics.
According to the KFF report, these prices are likely to continue to rise. Nearly a quarter of companies said they will increase employee contributions over the next two years.
The cost of health insurance rose this year by the largest amount since 2011, according to an annual survey by KFF, a nonprofit health care research organization.
According to the study, employees would pay an average of about 27.5 percent of their employer-sponsored health care premiums in 2023
In the case of health plans with single coverage, costs rose by 6.6 percent, just over $500, to $8,435 in 2023, according to the study. With separate plans, employees also paid a smaller share of their premiums: just under 17 per cent.
According to the KFF report, approximately 153 million Americans receive health insurance through their employers.
“There’s no way to narrow it down other than to say it’s a huge number,” Matthew Rae, deputy director of KFF’s Health Care Marketplace Program and co-author of the report. told Bloomberg.
“For a family of four, you’re actually giving pretty close to what a new car costs, just for a year, to keep everyone covered,” he said.
Rae attributed the rising cost of health insurance more broadly to inflation.
“It is clear that inflation is being passed on to premiums,” he said, noting that the pressure caused by rising costs is being passed on to both employers and employees.
Although inflation has fallen from a high of nearly 9 percent in June 2022, it is still above the Federal Reserve’s target of 2 percent.
The consumer price index rose 3.7 percent in the 12 months through September, according to Bureau of Labor Statistics data released earlier this month.
But on the plus side for employees is the fact that employers are not increasing the deductible, which is the amount a covered person must initially pay out of pocket before the insurer makes a contribution.
The average annual deductible is approximately $1,735 among workers who have a deductible for single coverage.
The share of family health insurance paid by the employee has grown every year since 2020, when it fell to the lowest level since 2006
Pictured is a Kaiser Permanente health center. It is one of the largest healthcare companies in the US
According to KFF, the steady levels of deductibles are a reflection of employers wanting to keep out-of-pocket costs low for their employees.
“Employers are spending all this money on health insurance because they want to recruit and retain the best employees possible.” Rae said. “Now is not the time, if you want to, to tamper with the coverage you provide.”
Last month, the Bureau of Labor Statistics announced that the U.S. economy added 336,000 jobs in August, nearly double analysts’ expectations. This led to fears that inflation is still out of control.
Overall, the cost of family premiums has increased by about 22 percent over the past five years, or about $4,350, which is more in line with inflation.
The share of family health insurance paid by employees has also grown every year since 2020, when it fell to the lowest level since 2006.
The report also shows that, on average, employees in small businesses contribute a much higher percentage of the premium for family coverage than employees in large companies: 38 percent instead of 25 percent.