Health Care Premiums Rise Sharply in 2023, Outpacing Inflation and Wages

-


Health care premiums for employer-sponsored plans increased by nearly 7% for both individual and family coverage in 2023, according to a report by KFF, a non-profit health policy research organization. This is a significant jump from the previous year, when premiums rose by only 1% and 2% for individual and family coverage, respectively.

The average annual cost of health insurance premiums for single coverage rose from $7,911 in 2022 to $8,435 in 2023, while the average cost for family coverage rose from $22,463 to $23,968. These increases are similar to the growth of workers' wages (5.2%) and inflation (5.8%) in the past year, but they still pose a financial burden for many Americans who are struggling with rising prices for other goods and services.



Workers’ contributions to their health insurance premiums increased by an average of $74 for single coverage and $469 for family coverage in 2023. On average, workers pay 17% of the premium for single coverage and 29% for family coverage, but these shares vary depending on the size of the employer and the type of plan. Workers at small firms (with fewer than 200 employees) pay more than workers at large firms (with 200 or more employees) for both single and family coverage.



The rise in health care premiums is driven by several factors:

  • Including the high demand for health care services after the pandemic
  • The increased costs of Covid-19 testing and treatment
  • The tight labor market for health care workers
  • The rising prices of prescription drugs and medical devices. 
  • Some insurers may have underestimated their costs in 2022 due to the uncertainty caused by the pandemic, and therefore had to adjust their rates upward in 2023.

The KFF report also examined the impact of the Affordable Care Act (ACA) on health insurance coverage and affordability. The ACA has expanded coverage to millions of Americans through Medicaid expansion, subsidies for buying plans on HealthCare.gov, and protections for people with pre-existing conditions. However, some gaps and challenges in the ACA remain, such as:

  • The lack of Medicaid expansion in 12 states, leaving millions of low-income adults uninsured or underinsured.
  • The high deductibles and out-of-pocket costs for many plans on HealthCare.gov, especially for those who do not qualify for subsidies or cost-sharing reductions.
  •  The limited choice and competition among insurers in some areas, resulting in higher premiums and fewer options for consumers.
  • The uncertainty and instability caused by ongoing legal challenges and policy changes affecting the ACA.

Some possible ways to improve the ACA and make health care more accessible and affordable for America:

  • Expanding eligibility for premium tax credits to more people, especially young adults and those with moderate incomes.
  • Providing enhanced tax credits to lower premiums and deductibles for consumers on HealthCare.gov.
  • Fixing the "family glitch" that prevents some families from getting subsidies if one member has an offer of affordable employer-sponsored coverage.
  • Creating a public option or a Medicare buy-in program to increase competition and choice among insurers.
  • Negotiating lower drug prices with pharmaceutical companies and allowing Medicare to do so as well.
  • Strengthening state regulation and oversight of insurers to ensure fair rates and adequate networks.

Health care reform is still a major issue in the US, as millions of Americans remain uninsured or underinsured, and many others face high costs and limited options for quality health care. Policymakers, employers, insurers, providers, and consumers are urged to work together to find solutions that can improve health outcomes and reduce health disparities in the country.

References

1.     Health Care Premiums Jump in 2023 After Modest Rise Last Year. (2023, October 23). Investopedia. Retrieved October 23, 2023, from https://www.investopedia.com/health-care-premiums-jump-in-2023-after-modest-rise-last-year-8363873

2.     KFF. (2023, October 23). 2023 Employer Health Benefits Survey. Retrieved October 23, 2023, from https://www.kff.org/report-section/ehbs-2023-summary-of-findings/

3.     KFF. (2023, October 23). Health Care Costs: A Primer. Retrieved October 23, 2023, from https://www.kff.org/report-section/health-costs-primer-2023-report/

4.     Purdue OWL. (2019, October 31). APA Formatting and Style Guide (7th Edition). Retrieved October 23, 2023, from https://owl.purdue.edu/owl/research_and_citation/apa_style/apa_formatting_and_style_guide/index.html

5.     The White House. (2023, September 9). [Fact Sheet: President Biden Announces New Actions to Lower Prescription Drug Prices and Enhance Health Care Affordability for Americans]. Retrieved October 23, 2023, from https://www.whitehouse.gov/briefing-room/statements-releases/2023/09/09/fact-sheet-president-biden-announces-new-actions-to-lower-prescription-drug-prices-and-enhance-health-care-affordability-for-americans/

6.     U.S. Department of Health and Human Services. (2023, September 15). HHS Announces the Availability of $25.5 Billion in COVID-19 Provider Funding. Retrieved October 23, 2023, from https://www.hhs.gov/about/news/2023/09/15/hhs-announces-the-availability-of-25-point-5-billion-in-covid-19-provider-funding.html

Top Posts

The Price of a Life: Why We Should Allow the Sale of Kidneys

-
Image
Organ transplantation stands as one of modern medicine's most miraculous frontiers, offering renewed hope and extended life for millions. Yet, this beacon of hope is dimmed by the uncomfortable reality that the demand for organs far exceeds supply. Kidneys, in particular, are in overwhelming scarcity, driving a critical and immediate need for innovative solutions. This brings us to a controversial, often-taboo subject that is ripe for ethical exploration—allowing individuals to sell one of their kidneys. To some, the very idea of monetizing a part of the human body is repugnant. However, as we'll explore in this opinion piece, there are compelling arguments in favor of kidney sales under a regulated, ethical framework. It is a move that I assert can not only help in saving lives but can also empower individuals and alleviate the burden on healthcare systems. Current State: An Organ Dearth and Unmet Need The grim backdrop of the current state of organ donation is the massive gap
Read more

The Unseen Health War: Why We Must Rally Behind MHPAEA's Proposed Rule Changes

-
Image
The human mind, an intangible yet omnipresent entity, defines the very essence of our existence. In recognition of this unassailable truth, the Mental Health Parity and Addiction Equity Act (MHPAEA) was enacted in 2008, a landmark legislation that underscored the importance of equitable mental healthcare access. However, a decade and a half later, MHPAEA’s legacy of promise remains similarly obscured, as patients with mental health and substance use disorders continue to succumb to a silent health crisis, shadowed by stigma and structural obstacles within the healthcare system. The MHPAEA, in its original paradigm, laid the groundwork for non-discriminatory insurance coverage for mental health and substance use disorder treatment, setting forth a tapestry of regulations to safeguard patient rights. Yet, even amidst its first implementing steps, the Act faced criticism for its ambiguity and lack of robust enforcement. This has culminated in a mosaic of covert insurance practices that pe
Read more

The Imperative of Extending Healthcare to All Immigrants: A Matter of Ethics, Economics, and Public Health

-
Image
The ongoing debate about extending healthcare to all immigrants often centers on ethical, economic, and public health considerations. As we navigate this complex issue, it is crucial to ground our discussions in evidence-based arguments. Ethical Considerations At its core, healthcare is a fundamental human right , not a privilege contingent on immigration status. Denying healthcare based on this status is a form of discrimination that contradicts the principle of universal human dignity. As healthcare professionals, we have a duty of care to all individuals, regardless of their immigration status. This duty aligns with the ethical principles of fairness and justice, which demand equal access to healthcare. Economic Implications Contrary to common misconceptions, providing healthcare to immigrants can lead to significant economic benefits . For instance, preventive care for immigrants can reduce long-term healthcare costs . The cost of treating advanced diseases is often higher than p
Read more