Climbing food and housing prices aren’t the only costs causing consumers to dig deeper into their pockets these days. Insurance premiums are forcing them to shell out more money, too.
According to a new survey from health policy research firm KFF, workers this year are contributing, on average, $6,575 toward the cost of insurance premiums for their employer-sponsored family health insurance, or $500 more than they paid in 2022. Meanwhile, annual premiums for family coverage plans jumped a whopping 7% this year, reaching $23,968 on average. By comparison, annual premiums last year increased 1%.
The surge in premium costs comes as accelerating inflation is putting a dent in workers and employers’ wallets and driving up medical device and drug costs, a report from the American Hospital Association shows. It also comes amid a series of mergers in the health care industry that have diminished incentives for insurers to price their coverage plans competitively, American Medical Association President Jesse M. Ehrenfeld, M.D., told MoneyWatch.
Mergers change landscape
“An era of unprecedented merger deals [in the health insurance industry] allowed big insurers to cement near-monopolies in markets across the country … increas[ing] corporate profitability at the expense of affordable high-quality care.” Ehrenfeld said.
The KFF study, which surveyed 2,133 non-federal public and private employers with at least three employees between January and July of 2023 and 2,759 companies that responded to a single survey question about their coverage offerings during that same time period, shows that insurance premiums aren’t the only costs dinging consumers’ wallets.
According to the poll, insurance deductibles have also spiked for the nearly 153 million Americans who rely on employer-sponsored coverage. Deductibles for workers with individual health insurance plans have increased 10% over the past five years, and 50% over the last $10 years to an average of $1,735, KFF data shows.
And while employers so far have absorbed some of the costs of rising coverage costs for their employees, that could also soon change: 23% of employers plan to pass on premium costs to their workers if insurance premiums rise again, according to the poll.
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