The costs of healthcare for average Americans have been hit particularly hard by the sustained high inflation the U.S. economy has seen over the past few years, according to KFF, a nonpartisan organization focused on health policy.
Just this year, premiums on family health insurance coverage for workplace plans increased by 7%, even as Americans’ wages only grew by 5.2% and total inflation rose by 5.8%, while over the last five years, premiums have risen 22% with wages increasing 27% and inflation 21%, according to a KFF news release. Inflation has continued to remain well above the Federal Reserve’s 2% target, rising 3.7% year-over-year in September after increasing the same in August. (RELATED: Runaway Inflation ‘Unlikely’ To Be Reeled In Under Biden Administration, Experts Say)
“Rising employer health care premiums have resumed their nasty ways, a reminder that while the nation has made great progress expanding coverage, people continue to struggle with medical bills, and overall the nation has no strategy on health costs,” Drew Altman, KFF President and CEO, said in the news release.
The average US family health insurance premium has increased from $6,000 in 2000 to $21,000 in 2022. That’s a 249% increase, or 5.8% per year, more than double inflation.
The biggest beneficiaries of this massive increase in costs: health insurance companies. UnitedHealth… pic.twitter.com/dZ98txRdeB
— Peter Mallouk (@PeterMallouk) October 6, 2023
Employer contributions have increased by 24% from 2018 to 2023, greater than the 19% increase that worker contributions saw during that same time frame due in part to a tight labor market, according to Axios. Workers contributed on average $6,575 towards family coverage, which is a $500 increase from last year, while employers contributed $17,393.
The U.S. added 336,000 nonfarm payroll jobs in September, far exceeding estimates by economists of 170,000 jobs, while the unemployment rate remained at 3.8%. In contrast, private employment data showed only 89,000 jobs were added in September.
The average annual deductible for single coverage this year remains similar to last year at $1,735, according to KFF. The average deductible has increased by 10% over the last five years and by 53% over the course of the last decade.
The Fed, in an effort to curb inflation, has raised its federal funds rate 11 times since March 2022, bringing the rate to a range of 5.25% and 5.50%. Inflation peaked at 9.1% in June 2022.
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