Family insurance premiums at work jump 7%. Employees should brace for more increases
Workers saw a steep hike in their employer-sponsored health insurance in 2023 after little to no growth in 2022 — and the upward pressure is expected to continue.
The annual cost of family premiums for employer coverage climbed 7% on average this year, reaching $23,968, according to KFF’s 2023 Employer Health Benefits Survey. Workers are now contributing an average of about $6,575 per year toward their family premium, almost $500 more than in 2022.
Single coverage premiums also rose an average of 7% to $8,435, the report found. Both types of premiums increased significantly faster in 2023 than in 2022, according to the report.
While the increases are steep, they are pretty much in line with the 5.2% growth in wages and 5.8% growth in inflation over the past year, the report said. In the past five years, these three measurements have stayed about equal, with premiums rising 22%, wages growing 27% and inflation climbing 21%.
Experts said the increase in deductibles “suggests that the higher overall prices we have seen since 2022 in the rest of the economy have begun to affect premiums.”
As inflation and the cost of labor are expected to moderate over the next two years though, premiums might not reflect these changes. Nearly a quarter of employers told KFF they plan to increase worker contributions to premiums in the next two years, according to the report.
Low growth deductibles
While premiums are rising, deductible amounts have grown relatively slowly, and employers said they are aware that workers may not be able to afford higher out-of-pocket medical costs, the report said. The average deductible amount for workers with single coverage in 2023 is $1,735, which is slightly lower than 2022’s average of $1,763.
This minimal growth can be attributed to several factors, the report said.
More than half of employers said they are aware that their workers are concerned about the affordability of cost-sharing requirements, KFF found. Employers are likely concerned, too, and don’t want to lower their coverage offerings amid the ongoing tight labor market conditions.
This story was originally published October 18, 2023 at 9:54 AM with the headline "Family insurance premiums at work jump 7%. Employees should brace for more increases."
