Health insurance costs for employer-sponsored coverage skyrocketed this year, a sharp departure from virtually no growth in premiums last year.
The 2023 benchmark KFF Employer Health Benefits Survey found that amid rising inflation, family premiums for employer-sponsored health insurance climbed seven percent on average this year to reach $23,968, compared to last year when there was little growth in premiums, KFF announced. The survey included more than 2,100 small and large employers.
On average, workers this year contribute $6,575 annually toward the cost of family premium, up nearly $500 from 2022, with employers paying the rest. Future increases may be on the horizon, as nearly a quarter (23 percent) of employers say they will increase workers’ contributions in the next two years.
Workers at firms with fewer than 200 workers on average contribute nearly $2,500 more toward family premiums than those at larger firms ($8,334 vs. $5,889). A quarter of covered workers at small firms pay at least $12,000 annually in premiums for family coverage.
This year’s seven percent increase in average premiums is similar to the year-over-year rise in workers’ wages (5.2 percent) and inflation (5.8 percent). Over the past five years, premiums rose 22 percent, in line with wages (27 cent) and inflation (21 percent).
Among workers who face an annual deductible for single coverage, the average this year stands at $1,735, similar to last year. The average deductible amount has increased 10 percent over the last five years and 53 percent over the last 10 years. Workers at small firms (under 200 workers) on average face much larger deductibles than workers at larger firms ($2,434 vs. $1,478).
The modest rise in deductibles may reflect employers’ perceptions about the burden of cost-sharing on workers. More than half (58 percent) of employers say that their workers have at least a moderate level of concern about the affordability of their plan’s cost-sharing requirements.
“Rising employer health care premiums have resumed their nasty ways, a reminder that while the nation has made great progress expanding coverage, people continue to struggle with medical bills, and overall, the nation has no strategy on health costs,” KFF President and CEO Drew Altman said in the announcement.