Inflation is reportedly about to careen into employer-sponsored health insurance, raising rates faster than in the last decade.
According to CNN, “Companies plan to shoulder most of the increase, but many workers could also feel the pinch in the form of higher premiums and out-of-pocket costs for care, benefits consultants say. Some companies may also limit the coverage in various ways to blunt the jump in cost.”
As the Deseret News recently reported, the average cost for a family health insurance plan through an employer in 2023 was close to $24,000, which was itself a 7% jump from the previous year, according to KFF’s annual employer health benefits survey.
The largest share of insured, about 153 million Americans, get their coverage through employer-based plans, per KFF, which used to be Kaiser Family Foundation.
“Higher prices account for more than half of the jump. Though inflation hit its peak last year, the impact is often delayed in the health care sector because contracts between insurers and medical providers are usually locked in for several years,” per CNN.
Reuters reported that benefits consultants for Aon, Mercer and Willis Towers Watson expect the health care costs for employers to jump 5.4% to 8.5% next year “due to medical inflation, soaring demand for costly weight-loss drugs and wider availability of high-priced gene therapies.”
Per Reuters, “A survey conducted by Mercer, a unit of Marsh McLennan, found over two-thirds of employers either do not plan to shift any cost increase to their staff or will pass on less than the expected rise in 2024.”
“They don’t want to add more financial stress on employees who are also coping with inflation, especially in this time where they’re really relying on their health benefits as a way to keep employees working for them,” Beth Umland, Mercer’s director of health and benefits research, told Reuters.
Although inflation is tempering, Debbie Ashford, North America chief actuary for Health Solutions at Aon, told CNN that medical providers are asking insurers to give them “larger cost increases to cover the higher cost of wages and supplies that they endured during the last couple of years but were unable to pass on to payers,” she told CNN.
Marketplace plan costs may also go up, according to NPR’s guide to open enrollment in the Affordable Care Act marketplace. To be covered by Jan. 1, people need to choose a plan by Dec. 15, even if the final deadline is later. And this year, those who use a broker have to go through a certification process that can slow things down, so earlier is better than later, the article warns.
NPR says some plans will be cheaper, but others will cost as much as 2% to 10% more, based on the Peterson-KDD Health System Tracker early assessment of rate requests. The median increase was 6%.
But KFF warns that plans may have changed, with various results, including putting a favorite doctor outside of the network or altering what’s covered, so consumers shopping for insurance should pay attention to the details.
That’s also true in the case of employer-sponsored health plans.