Health insurance costs have risen by 7% this year, leading some to question Biden’s Economic Agenda. Read On for More.
Inflation Hits the Headlines
Inflation has been making headlines lately, driving up the prices of everyday essentials like groceries and rent.
But it’s not just these basic necessities that are feeling the squeeze. Health insurance costs are also on the rise, impacting millions of Americans.
Highest Increase in a Decade
According to the annual employer health benefits survey conducted by KFF, a private health foundation, the average cost for a family health insurance plan offered through an employer has jumped by 7% this year, reaching $23,968.
This marks the highest rate increase in a decade.
Individual insurance costs have also seen a similar 7% increase, reaching $8,435.
More than 150 million Americans obtain their health insurance through their workplaces, making this a significant concern for a vast number of individuals and families.
Higher Prices for Consumers
KFF keeps a close watch on employer health insurance trends through its annual survey of over 2,100 large and small companies.
As the costs of health insurance continue to rise this year, it’s likely that some consumers will face higher prices in the upcoming weeks when their employers start the enrollment process for health insurance plans in 2024.
More Bad News
The survey also revealed that nearly one in four employers expects to share a portion of these increased costs with their workers.
This means that employees may see larger deductions from their paychecks at a time when inflation is outpacing wage growth.
“Premiums Are Catching Up”
Matthew Rae, the associate director of KFF’s healthcare marketplace project, stated, “We’ve had this period of super high inflation, and now premiums are catching up.”
Substantial Cost Increases
Companies usually bear the majority of health insurance expenses, using these benefits as an incentive to attract and retain employees.
Consequently, they are often hesitant to pass on substantial cost increases to workers, especially at a time when unemployment remains low.
Bad News for the Little Guy
The size of the company can have a significant impact on how much workers pay for their health insurance.
The survey revealed that employees at smaller companies typically pay more for health insurance.
Little Fish, Big Bill
In the previous year, workers at companies with fewer than 200 employees paid $8,334 for a typical family health insurance plan, which is nearly $2,500 more than what workers at larger companies paid.
Alarmingly, about one in four workers at small companies paid $12,000 or more for a family health plan.
The cost of health insurance is determined by how much insurance plans cover expenses such as hospital bills, doctor visits, prescription drugs, and other medical services.
Even if only a few employees at a smaller company are diagnosed with serious illnesses like cancer or other chronic conditions, requiring costly prescription drugs or extended hospital stays, the expenses can skyrocket.
Anson Industries, a specialty contractor headquartered in suburban Chicago, provides health insurance for nearly 300 employees and their families.
In the past four years, the company hasn’t increased employees’ contributions to health insurance, despite enduring annual hikes of 25% and 15% in the previous two years.
Remote Work Woes
As they finalize health plan options and pricing for 2024, the company is determined to keep health insurance and profit-sharing benefits affordable to attract and retain workers, especially as they struggle to retain younger employees who seek remote work opportunities.
The key question remains: why are health insurance rates rising despite a slowdown in inflation?
Health insurance prices are typically set before people actually receive healthcare.
If unexpected costs arise from higher medical claims or increased labor costs, insurance companies raise premiums for the following year.
Living Expenses Surge
In the prior years, KFF’s surveys noted a mere 1% increase in health insurance premiums for family plans, even as prices for other daily living expenses surged due to high inflation.
However, as overall inflation has decreased this year, health insurance prices are once again on the rise.
Prescription Drugs Fuelling Price Hike
Another survey conducted by health benefits consultant Mercer predicts a 5.4% increase in health insurance costs for 2024, following a decade of average annual increases of 3% to 4%.
This increase is primarily attributed to higher expenses in prescription drugs and wages for healthcare workers.
Higher Wages, Higher Prices
For instance, on October 13, Kaiser Permanente reached a tentative agreement with 85,000 healthcare workers to raise wages by 21% over four years, establishing a minimum hourly wage of $25 for California workers and $23 for employees in other parts of the nation.
While consumers will ultimately shoulder these higher wages, employers and government insurance plans like Medicare and Medicaid are just one of the factors contributing to the rising healthcare and health insurance costs.
Hospital mergers are also playing a significant role in driving up prices, as these larger healthcare companies gain enough market power to negotiate higher prices when dealing with health insurers.
This increase in healthcare costs often results in lower wages for workers, leaving consumers with less to spend on housing, food, and education.
The rising cost of health insurance is a significant concern for many Americans, impacting their financial stability and overall well-being.
This has led to some controversy online, with one widely shared post commenting on the reason for the price increase: “Because of government meddling. Every market the government touches it screws up.”
“Health Insurance Is a Scam”
Others online have blamed alternate factors, with one comment stating, “It’s because health insurance is a scam.” Another simply said “Bidenomics.”
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Grant Gallacher is a seasoned writer with expertise in politics and impactful daily news. His work, deeply rooted in addressing issues that resonate with a wide audience, showcases an unwavering commitment to bringing forth the stories that matter. He is also known for satirical writing and stand up comedy.