Health insurance costs that are not yet affected by inflation may soon rise
- The average family health insurance plan increased 1% this year, but experts warn that inflation will send prices higher in 2023.
- Nearly half of Americans said a medical bill has put them in debt.
- About 30% of large employers say their networks do not have enough behavioral health doctors or counselors to get workers on time.
The cost of family health insurance plans rose just 1% this year, even as inflation hit a four-decade high, with higher prices for gas, groceries, rent and other living expenses.
The average cost of an employer-provided family health plan is $22,463 this year, up $242 from a year ago, according to the Kaiser Family Foundation̵[ads1]7;s survey of employer health benefits released this week. Employers cover most of the health insurance category for the nearly 159 million Americans who get coverage through the workplace; workers this year will pay $6,106 for a family plan, usually through payroll deductions.
Officials warn that significant price increases could emerge in 2023 as inflation hits the healthcare sector and hospitals, doctors and drug companies demand more lucrative payments from health insurers and employers.
Kaiser Family Foundation President and CEO Drew Altman said current rates may be “the calm before the storm, as recent inflation suggests larger increases are imminent.”
Everything else costs more. Why are health insurance prices flat?
This year’s health insurance premiums were set a year ago before inflation began to take off, according to Gary Claxton, Kaiser senior vice president and director of the healthcare marketplace project.
Claxton said the health care system is also dealing with the effects of the coronavirus pandemic. People delayed doctor and hospital visits in 2020 as COVID-19 emerged, so insurers spent less money on routine care and non-emergency surgeries. The insurance company’s profits doubled that year.
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“Insurance companies are still making money,” Claxton said. “It’s not like they were struggling and really needed to raise premiums.”
The Kaiser report warned with inflation this year at 8% — the highest rate since the early 1980s — employers and consumers could see higher-than-average health insurance premium increases next year. Other analysts agree. Benefits consultant Segal projects that health insurance costs will rise 7.4% next year as employers and consumers absorb bills from doctors, hospitals and drug companies.
In a tight labor market, employers are reluctant to make workers pay more
Most large companies are self-funded and directly pay their employees’ medical claims, although a private health insurance company administers the plan. And some companies have been reluctant to make workers pay a larger share for health insurance or pass on costs through higher deductibles.
Kaiser reported that the average deductible for a person is $1,763, up slightly from $1,669 last year. People must pay this amount with their own money before coverage starts.
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“Going into this year, we were still in a tight labor market,” Claxton said. “Recruiting employees is expensive (and) upsetting your existing employees is not a good idea.”
But as employers absorb higher medical costs and the labor market softens, companies may be more willing to raise premiums and deductibles, Claxton said.
Employees in companies with fewer than 200 employees must pay a larger share of medical costs. The typical deductible at a small company is more than $2,500, or about $1,000 more than at a large firm.
Nearly half of Americans have medical debt
Other polls show that Americans are struggling to pay for medical care as daily living costs rise. About 46% of people said a medical bill has put them in debt, according to a poll released this week by telehealth company Babylon.
About 1 in 3 people have problems paying for routine or emergency care and private health insurance. Those aged 25 to 34 had the toughest time paying for medical care; More than half of young adults struggled to afford private health insurance, a poll of 5,000 adults conducted in August found.
A Commonwealth Fund survey last month found that 42% of Americans with health insurance had trouble paying a medical bill or past medical debt. And 46% of working-age adults skipped or delayed care in the past year because of cost.
However, the Commonwealth Fund report said those with employer health insurance had more robust coverage compared to those who bought their own health insurance directly.
Mental health network falls short
Employers are also focusing more on the mental health needs of their workers following the coronavirus pandemic.
The Kaiser survey said nearly half of large employers reported that more workers are using mental health services. Almost 1 in 3 report that more workers are requesting family leave to address mental health care.
But the survey also showed that a long-term shortage of mental health personnel makes it difficult for workers to see a counselor or other specialist. About 30% of large employers say their networks do not have enough behavioral health doctors or counselors to get workers on time. These shortfalls persist even though more than 1 in 4 large companies expanded their network of physical and external mental health telehealth providers.
Ken Alltucker is on Twitter at @kalltucker or can be emailed at alltuck@usatoday.com
