I have mentioned that the official US government method for measuring health care and health insurance inflation is bizarre. According to those statistics, there is almost no inflationary impact, which is completely contrary to real-life experience. That is validated by the latest Kaiser Family Foundation survey of employer plans providing health benefits. The report covers a lot of ground and is important for understanding trends in the health care benefits that cover almost half of Americans, 153 million. Because of the level of detail, it may take a couple of posts to get through it all without overwhelming readers. (KFF Report)
On the headline numbers, single person coverage was an average of $8435 in 2023 and family coverage an average of $23,968, both up 7% over the prior year, and a three times or more faster rise than was experienced from 2021 to 2022. And compare that to the average 5.2% increase in wages. The good news for workers is that companies continue to bear the vast majority of that increase in coverage costs. The bad news for everyone, because everyone is a consumer, is that this growth means that every business has to raise prices to account for this important cost item, and health care and health insurance premium rises do contribute to the cycle of inflationary pressures.
These premium rates and increases can vary by employer size and type and by benefit plan type. For small employers, single premiums were an average of $8722 whereas in large ones they were $8321; while family premiums were fairly similar, $23621 in a small business versus 24104 in a large one. High deductible health plans have relatively lower average premiums, $7753 for single coverage and $22344 for family coverage, but the trade-off is more cost sharing for the employee. Private firms have average single premiums of $8078 while non-profits are at $9023 and governments at $8771. Shows what happens when you have competitive pressure and the need to generate returns versus just sucking off taxpayers or using donations.
More to follow.