In 2018, the cost of family health insurance coverage for both employers and workers was nearly $20,000, as reported by the Kaiser Family Foundation. While premiums have seen a modest increase in recent years, they have grown at a much faster rate than workers’ wages and inflation over time. The average family premium has risen by 55% since 2008, which is double the rate of workers’ wages and three times the rate of inflation.
Employers typically cover most of the cost, averaging $14,100 per year, leaving workers to pay an average of $5,550, which is a 65% increase from a decade ago. For single coverage, average total premiums have reached $6,900, up 47% from 2008, with workers contributing around $1,200 annually.
Deductibles have also become a significant financial burden for workers, with the average deductible now at $1,350, marking a 212% increase since 2008. This growth rate is eight times faster than wage growth. Moreover, more workers are now facing deductibles, with 85% subject to them in 2018 compared to 59% a decade ago. Additionally, a quarter of all workers now have deductibles of at least $2,000, up from 15% five years ago.
To combat rising premiums, some employers have resorted to increasing deductibles. However, high deductibles are a common source of frustration for Americans in terms of their health coverage. As long as out-of-pocket costs continue to outpace wage growth, health care expenses will remain a significant financial and political concern for individuals.
In response to these challenges, companies like Amazon, Berkshire Hathaway, and JPMorgan Chase have joined forces to improve healthcare options and reduce costs for their employees and businesses. Some companies have also started contracting directly with hospitals and providers to manage their workers’ health. For instance, General Motors and Henry Ford Health System have established a contract to provide care to thousands of GM workers and their families.
Employers are exploring various strategies to control costs, such as limiting networks to high-quality providers and offering coverage for telemedicine visits. While the availability of telemedicine has increased significantly in recent years, employee utilization of this technology remains low. Despite companies investing in telemedicine services, only a small percentage of employees have utilized this option.
It is evident that rising health insurance costs are a significant concern for both employers and workers. Employers are exploring innovative solutions to provide cost-effective and high-quality healthcare options for their employees. As the healthcare landscape continues to evolve, finding ways to manage costs while ensuring access to essential care remains a top priority for businesses and individuals alike.