As inflation cools, insurance rates climb
About 154M Americans and their families are covered by workplace
By: Ken Alltucker
USA Today
..... Escalating grocery bills and car prices have cooled. but price relief for Americans does not extend to health care, according to the annual employer health benefits survey released Wednesday [10/09/2024] by KFF, a nonprofit health policy organization.
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The average cost for a family health insurance plan offered through an employer increased 7% this year [2024 to $25,572.
..... It was the second consecutive year with a 7% increase after a decade of more modest annual increases. Family insurance rates increase by just 1% in 2022.
..... Insurance costs for individuals bumped up 6% to $8,951 per year, according to the survey. A year ago, [2023] individual plans increased 7%.
..... These rising health insurance costs add up for companies that pay the bulk of the tab and for families, many of whom are struggling to afford higher costs of rent and groceries. Health insurance costs rose at higher rates than the 4.5% increase in workers' wages and the 3.2% jump in inflation.
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KFF surveyed 2,142 non-federal public and private employers nationwide. About 154 million working-age Americans and their families get health insurance through the workplace.
..... the acceleration in health insurance rates likely reflects the "Growth of prices in the economy overall, said Matthew Rae, associate director of KFF's health care marketplace project, Rae added people are also accessing health care more frequently after skimping on doctor visits and routine screening during the COVID-19 pandemic.
..... "We've rebounded to normal levels," Rae said.
..... Medical inflation tends to lag behind overall inflation, which is one explanation for health insurance prices increasing as overall inflation slows, said Tim Nimmer, senior vice president of insurance services and operations at human resource service provider TriNet.
..... Employer are attempting to limit the amount of the health insurance hike they pass on to employees, according to the survey.
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While the average cost of family health insurance has surged 24% since 2019, paycheck deductions for workers increased just 5% over the same period. Employers are absorbing most of these expenses.
.....For the average family plan, companies shelled out $19,276 this year [2024] while workers contributed $6,296 though payroll deductions the survey found.
..... The average deductible for an individual was $1,787 this year, [2024] just $52more than a year ago, according to the survey.
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The rate companies pay for insurance is based on an employee;s medical spending. Some employers seek to hospitals and provider form their insurance plans' networks. Nearly 1 in 5 companies with 5,000 or more employees have a "narrow network" of providers, the survey said.
..... Nevertheless, many small companies struggling to find ways to limit the spiraling cost of health insurance.
..... Health insurance prices for Epting Distributors, a small business in South Carolina that distributes heating and air conditioning systems, jumped nearly 30% this year, [2024] said Laura Ivey, the company's human resources and payroll coordinator.
..... Epting pays for health insurance for about 130 employees, many of whom are older and dealing with chronic medical conditions. some are likely eligible for Medicare but choose to remain on the company's health insurance, Ivey said.
..... Ivey is frustrated because health insures and medical providers aren't transparent about the prices of medical services, she said. If she had this information, she said, she could advise workers to choose lower-cost options - such as getting an X-ray or blood test at an outpatient center instead of a hospital.
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A federal rule that went into effect in 2021 requires hospitals to post the cash prices and rates negotiated with health insurers for a broad list of procedures in a computer-readable format so the information can be analyzed. Ivey said the transparency hasn't helped her company lower costs, in part because companies or consumers need special programs on high-powered computers to unlock the pricing data.
..... "It's not accessible at all - and I've tried," she said.
..... Instead, Epting and its employees pay ever-higher insurance rates each year, which is a point of contention for some workers.
..... "We do have people who say, 'I'm going to go work for somebody down the street because they're going to cover more of my health insurance' " Ivey said.
..... While many companies will cover drugs such as Ozempic for diabetes, that same coverage doesn't apply to similarly formulated weight loss drugs such as Wegovy that sometimes cost more than $10,000 yearly.
..... Most large employers don't cover the cost of these expensive new weight-loss drugs. Those who do cover these drugs often impose requirements, the survey said, such as visiting a dietitian or a psychologist, or rolling in a weigh loss program before or while taking one of the new class of weight loss drugs, called GLP-1 agonists.
..... Among the 1 in 4 large employers who cover weight-loss drugs, 46% said covering them has a "significant impact" on their prescription drug spending.
..... However, most companies don't cover these drugs and don't plan to anytime soon. Among companies with 200 or more employees that do not cover GLP-1 agonists, primarily those sued for weight loss, 62% said they are "not likely" to pay for the drug next year. [2025]