This is always a great report, probably the best to understand trends for employment-based health plans. 159 million people are covered by these plans. Remember, unlike other trend reports, this one is a look at the year it is issued in, not a forward projection of costs in the next year. That context is important because 2022, after all the epidemic whipsawing, was a pretty flat year, but I can assure you that 2023 premiums are rising and are going to rise significantly, because providers are increasing prices rapidly.
The numbers are stunning as it is. For a single person the average annual premium is $7911, and the employee on average pays $1327 of that amount. For a family of four, the average annual premium is $22,463 and the employee contributes on average $6106 of that total, or over a fourth. Those amounts are roughly the same as in 2021. Changes in care patterns and reductions in payments for CV-19 treatments account for most of the lack of increase from 2021 to 2022. And when health plans set premiums for 2022, they were unaware of how much inflation would accelerate. Over the last five years the premium for a family of four has risen a total of 20% and over the last ten years, by 43%.
Large and small employers have similar premium costs for single and family coverage. Employees not only pay a significant portion of the premiums, 17% for single coverage on average and 28% for family coverage, but also have cost-sharing burdens, including deductibles and copayments or coinsurance at the time of service. Premium contributions and cost-sharing is generally higher at small companies. About a third of employees in single coverage plans have over a $2000 deductible.
65% of employees are in a self-insured plan. PPO designs cover 49% of workers, 29% are in a high-deductible plan and 12% in an HMO design. Premiums and cost-sharing amounts tend to be highest in the Northeast and lowest in the South. Employees in state and local governments have better benefits and lower premiums and cost-sharing, which is just wrong. Most employers offer some kind of wellness and care management services. One result of the epidemic is that almost all employers now cover some form of telemedicine.
The summary of the report’s findings is here. (KFF Report) The full report is also available on the website. Stay tuned for the 2023 analysis about this time next year.