Soaring health insurance costs strain workers, employers
NEW YORK, UNITED STATES — Workers and employers in the United States are on a major financial strain amid skyrocketing health insurance premiums.
A 7% increase from 2021, the average annual premium for family coverage surged to nearly $24,000 this year, according to KFF’s Employer Health Benefits survey.
“We have a huge premium increase this year. There’s just no other way to cut it,” said Matthew Rae, who co-authored the survey. “There are lots of affordability challenges for employer coverage.”
Employees are now paying $6,575 on average from 8% or almost $500 more than last year.
Even single coverage is becoming painfully expensive, with premiums rising 7% to $8,435 annually. Workers are contributing over $1,400 towards this, about $75 more than before.
These steep hikes align with broader wage growth and inflation since 2022, but substantially impact household budgets.
Smaller firms are hit hardest, with far higher premiums than larger companies. For a 42-person Arizona business, a 13% total premium jump this year forced them to raise worker contributions 3% and prices up to 5%. As costs soar, employers try maintaining coverage to attract and retain talent amid tight labor markets.
Looking forward, over 1 in 4 companies plan to further increase employee premium contributions in the next two years. Women face particular challenges, paying similar premiums to men but getting less comprehensive coverage, resulting in higher out-of-pocket costs.
For the uninsured, premium hikes also loom as Affordable Care Act insurers request median 6% increases for 2023, citing rising medical costs and healthcare utilization.
As premiums consume more paychecks, workers and employers alike face painful choices in the battle for affordable healthcare.
