'Storm' of Inflation Looms for Health Insurance Premiums in 2023
Annual premiums for family health insurance are expected to skyrocket to higher rates in 2023 due to rampant inflation, according to a Kaiser Family Foundation report.
While family rates increased modestly by about one percent to $22,463 in 2022 from $22,221 in 2021, which is well below the national overall inflation growth of 8.2 percent, employers are now sounding the alarm that premiums may surge next year, according to the 2022 KFF Employer Health Benefits Survey. “Employers are already concerned about what they pay for health premiums, but this could be the calm before the storm, as recent inflation suggests that larger increases are imminent,” KFF President and CEO Drew Altman said in Thursday’s report. “Given the tight labor market and rising wages, it will be tough for employers to shift costs onto workers when costs spike.” Employer-sponsored family coverage cost an average of $22,463 this year—a minor change from 2021 while inflation and wages rose. That’s unusual, as since 2012, family premiums have risen 43% – more than inflation (25%) and a little more than wages (38%): https://t.co/hk1rrqtfqb pic.twitter.com/caFsqGL7vY — KFF (Kaiser Family Foundation) (@KFF) October 28, 2022 The health care think tank notes that the reason why health premiums did not increase last year was that many premiums were finalized in 2021 before inflation grew out of control. “As inflation continues to grow at relatively high levels, we could potentially observe a higher increase in average premiums for 2023 than we have seen in recent years,” the report reads. Price hikes may not even be noticed until 2024 as the rates have been mostly set for 2023, according to Glen Losev of Bloomberg Intelligence. However, with a recession seemingly looming, employers will be firing many people, which would lead to a drop in the number of employees to provide insurance for, Loslev added. Despite health insurance rates staying relatively the same over the past year, health insurance costs have skyrocketed since Obamacare was enacted, and a majority of health provisions were added in 2014.
The annual deductible for a single coverage plan is currently $1,763, up 61 percent from $1,097 in 2012. For family coverage, costs have increased by 43 percent since 2012, while inflation has only grown 25 percent and wages have risen by 38 percent. Employer-sponsored insurance accounts for approximately 159 million nonelderly Americans. You can follow Ethan Letkeman on Twitter at @EthanLetkeman.
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