Insurance Premiums Skyrocket Amid Rising Health Care Costs

Published on January 16, 2024, by Law Office of Matthew L. Sharp

Health Care Litigation

Insurance Premiums Skyrocket Amid Rishing Health Care Costs

A recent report published by the national non-profit foundation formerly known as The Kaiser Family Foundation (KFF) highlighted how annual family premiums for health insurance coverage are steadily increasing, and this trend is expected to continue in the foreseeable future.

As for what is behind the skyrocketing insurance premiums, it not only centers around rising healthcare costs but also on other factors. Below, we’ll explain more about what is driving costs and how much premiums are being impacted.

Where Current Employer-Sponsored Health Insurance Rates Stand

The researchers who worked on this KFF 2023 Employer Health Benefits Survey found that annual premiums for families on employer-sponsored health insurance policies increased to around $23,968 this past year, an amount that was, on average, 7% over the previous year.

This percent increase stands in stark contrast to what happened in 2022 when there was little to no increase in those same premiums.

From an employee perspective, this increase in annual premiums for families meant that workers ended up making a $6,575 contribution toward a year’s worth of insurance coverage, an estimated $500 increase over what they paid in 2022. Employers picked up the rest of the tab.

Researchers found employer contributions were typically $2,500 higher at firms with less than 200 workers. They also learned that at least 25% of those employees at smaller companies paid as much as $12,000 yearly for coverage for their family members.

In addition to workers and employers both having to make larger contributions toward family premiums at smaller firms, they also typically pay higher annual deductibles. In terms of this, the researchers found that the average deductible for employees at smaller companies is $2,434 versus the $1,478 that larger corporations’ workers pay.

While this past year’s increase in employee contribution may seem like a small amount for some, the researchers polled employers about how the increases in paying their share of employees’ family premiums may impact how they do business in the future. They learned that at least 23% of employers will likely raise how much workers must contribute during the next two years to defray their operational costs.

While this year’s 7% average premium increase may seem significant, researchers also found that inflation and workers’ wages increased at similar rates between 2022 and 2023, at 5.8 and 5.2%, respectively. The five-year trend shows similar increases as far as these three indicators are concerned as well.

In polling employers, researchers found that 58% of them sense that their employees are concerned about their ability to afford health care coverage, especially in light of ever-increasing deductibles.

KFF’s research shows that at least 153 million Americans receive their health insurance through their employer.

Coverage of Certain Medical Conditions Is Leading to Increased Premiums

Increasing annual premiums are the provision of certain medical services and varied state laws affecting that, which most notably impacts the rates employees and employers at large multi-state corporations have to pay. As an example, there is abortion.

As you’re likely aware, the U.S. Supreme Court made it so that abortion was no longer a constitutional right on a federal level starting in June 2022, thus allowing states to decide whether or not to allow it.

Many of the large national corporations (ones with at least 200 employees) polled have had to make decisions regarding coverage for abortions offered. Of the more than 2,000 firms surveyed:

  • 32% continue covering legal abortions for any reason
  • 18% only provide coverage for legal abortions performed under select circumstances, such as it endangers the health or life of the mom or when the pregnancy resulted from incest or rape
  • 10% don’t provide coverage for legal abortions at all

As much as 26% of those larger employers polled plan to offer financial assistance to workers needing to travel out-of-state to obtain legal abortions. The remaining companies’ representatives polled were unsure of the type of abortion coverage their firm might offer.

Mental Health Coverage Is Lacking Among Workplace Health Plans

Abortion aside, other poll questions focused on coverage of mental health and substance abuse provided under employer-sponsored health plans.

The researchers learned that while at least 88% of larger companies with 200 or more employees report that their networks offer their employees timely access to primary care doctors, only 59% and 58% percent, respectively, contend that they have timely access to mental health or substance abuse services through their health plans.

This has reportedly led to 18% of large firms polled proactively taking steps to amplify the number of mental health providers within the insurance plans they offer their employees.

One additional mental health-related data point that stands out is that at least 21% of larger companies polled say that their plan places restrictions on emotional and behavioral health services, which the study authors highlight could affect employees’ access to proper care if they have long-term needs.

Statistics Regarding Employer-Sponsored Health Insurance

Researchers learned that an ever-increasing number of employers are offering coverage even though they are not required to offer health insurance by law since they have under 50 full-time employees. Employers with the following amount of employees offer coverage at the following rates:

  • 3 to 9 workers: 42% of firms offer health plans to at least some workers
  • 10 to 199 employees: 83% have access to a health plan
  • Over 200 workers: Nearly all offer insurance

Another interesting statistic is that of the firms offering health coverage, 91% offer dental and 82% offer vision insurance, respectively. These percentages mark 46% and 17% increases in what employers were providing in 2010. Only 26% of companies currently offer long-term disability coverage.

Also affecting the costs of premiums are costs for gender-affirming surgeries. At least 23% or more of firms with 200 or more workers cover these types of procedures, whereas 37% do not. At least 40% of firms polled weren’t sure if they offered this coverage. Representatives of at least 62% of companies with 5,000 or more employees polled contend that they only added this coverage to plans offered to employees within the past two years.

Lastly, at least 19% of firms with 200 or more workers offer employees a “center of excellence” program, which gives them access to a smaller selection of health care providers in exchange for lowering their cost-sharing expenditures.  22% of companies offering such programs introduced it within the past two years.

Of those companies with such programs in place, they focus on the following conditions and the respective rates:

  • Substance abuse disorders: 28%
  • Mental health: 30%
  • Bariatric surgery: 31%
  • Back or spine surgery: 42%
  • Joint replacement: 45%

How This Data Regarding Health Insurance Impacts You

As we discussed in the introduction to this article, receiving health care is so cost-prohibitive for some at this point that even despite having a job, it’s challenging for workers to afford it. However, as you likely noted above, insurance can be quite costly, too. As the data suggests above, premiums are impacted by shifts in laws and other factors and are expected to continue increasing for the foreseeable future.

Many of us may anticipate our insurance covering our care in the future, only to find out that there are delays in processing claims and then ultimate denials.

This could further increase our expenditures on receiving medical care. While some tactics, including decisions not to pay, may be something insurers are allowed to do under the terms of your policy, it might not be the case. A health insurance disputes attorney can review the circumstances surrounding your situation to assess whether you have a claim worth pursuing in court.

Contact our firm, The Law Office of Matthew L. Sharp, to review your case and advise you of your legal options when a conflict with your health plan arises.