Employer-sponsored health care costs are rising and ‘a bit untenable’

employer-sponsored Health insurance Costs are getting higher in the U.S., according to new data.

arrive Kaiser Family Foundation (KFF) 25th 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, up 7% from last year.

Workers also pay more in premiums. In 1999, workers paid $318, or 14.4 percent of the average annual premium for individual coverage of $2,196. In 2023, workers paid premiums of $1,401, for a total of $8,435, accounting for 16.6% of overall premiums.

“I think this just goes to show the continued pressure employees and employers face in terms of being able to provide health insurance to their employees and making it affordable,” said Andrea Ducas, vice president of health policy. .” The Center for American Progress told Yahoo Finance, “That’s a little flimsy.”

What’s driving up costs?

Health care affordability continues to be a major issue in the United States overall.

one October 2023 Survey According to the Commonwealth Fund, 38% of U.S. adults delayed or skipped school in the past year health care or prescription drugs because they can’t afford them, including 54% of people with employer-sponsored insurance.

“I think even for workers, especially low-wage workers, many of the cost-sharing provisions required by employer-sponsored health plans raise real affordability issues. [for] How well do they actually use the plan,” Matthew Rae, associate director of healthcare market programs at KFF, told Yahoo Finance.

A group of Florida residents sat down with insurance agents to try to buy health insurance.

On March 20, 2014, a group of Florida residents sat with insurance agents trying to purchase health insurance in Miami. (Joe Raedle/Getty Images) (Joe Reddell via Getty Images)

Ducasse explained that health insurance companies determine premium costs based on the amount they expect to spend on a specific insured population. Health care utilization and cost of care are two major drivers, she added.

Although inflation has cooled in recent months, the Commonwealth Fund survey found that nearly two-thirds of working-age adults said rising prices had some impact on their families’ ability to pay for health care in the past year. This includes 60% of household employer-sponsored coverage. Of the 60 percent, those with incomes below 200 percent of the federal poverty level say they face the greatest hardships from inflation and health care costs.

Ray speculated that part of the increase in premiums could be due to people delaying their use of health care during the pandemic, as well as new treatments that cost more money.

He added: “Our health care market is becoming increasingly consolidated, giving providers greater power to command higher prices. This will also lead to higher premiums over time.”

‘The labor market is really important here’

Wray also noted that the tight labor market has led to higher premium costs as employers want to ensure they are offering benefits that attract talent.

“I think covering a lot, having a broad choice of providers, lowering cost-sharing, all of those things are going to lead to higher premiums,” he said, noting that employers have become more selective in cutting benefits. “The labor market is really important here.”

While premium costs are still increasing, growth in deductible costs (the amount an individual pays for covered medical services before an insurance plan starts paying) has slowed in recent years. The average deductible for a single policy in 2023 is $1,735, just 10% higher than five years ago (53% higher than in 2013).

“This relatively low growth may reflect employer concerns about workers’ ability to pay higher out-of-pocket costs, particularly for lower-wage workers,” the KFF survey noted. In this era of low unemployment and fierce competition for the labor force, During low times, their insurance products are attractive. “

The KFF survey found that 90% of U.S. workers have a deductible, up from 55% in 2006. Rae said this highlighted the growing complexity of cost-sharing over the years.

The survey shows that 25% of employers with 50 or more employees believe that employees have “high” concerns about affordability of cost sharing, while 33% believe that employees have “moderate” concerns.

“It’s becoming more and more unaffordable for people to use insurance and it’s becoming more and more difficult for employers to provide it,” Ducasse said. “There’s a lot that needs to be done to reduce the cost of care.”

Adriana Belmonte is a reporter and editor covering politics and health care policy at Yahoo Finance.You can follow her on Twitter @adrianambells and contact her at adriana@yahoofinance.com.

Click here for an in-depth analysis of the latest health industry news and events affecting stock prices

Source link

Leave a Comment