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
Ehrenfeld stated that the health insurance industry witnessed a period characterized by an exceptional number of merger deals, which enabled major insurers to establish near-monopolies in various markets nationwide. Consequently, this pursuit of corporate profitability came at the detriment of accessible and top-notch healthcare.
According to the KFF study, conducted between January and July 2023, a total of 2,133 non-federal public and private employers with a minimum of three employees were surveyed. In addition, 2,759 companies responded to a survey question about their coverage offerings during the same time frame. The study reveals that consumers’ expenses are not limited to insurance premiums alone.
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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.
According to the poll, if insurance premiums continue to increase, 23% of employers intend to shift the burden of rising coverage costs onto their employees, despite having previously absorbed some of these expenses.
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