Employer Health Insurance Premiums Have Risen 22% in 5 Years and Wages Can’t Keep Up
With so much attention paid to the skyrocketing cost of consumer goods, many Americans might not have noticed how expensive their employer-sponsored health insurance plans have gotten. But a new survey from the Kaiser Family Foundation spells it out: Premiums for family coverage have risen by more than one-fifth over the last five years and nearly one-half over the last 10.
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The average annual premium for employer-sponsored health insurance in 2021 is $7,739 for single coverage and $22,221 for family coverage, according to KFF’s annual Employer Health Benefits Survey, which was released on Wednesday. Those numbers represent a 4% increase from last year. Over the same time frame, workers’ wages have risen by an average of 5% and inflation has increased by 1.9%.
The average premium for family coverage has surged 22% since 2016 and 47% since 2011.
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The survey was conducted during the first half of the year, while many Americans were being vaccinated for COVID-19. Among the interesting developments that have taken place since the beginning of the pandemic:
- Seventeen percent of smaller companies (50-199 employees) and 34% of larger companies have expanded or modified the content of their existing wellness programs to better address the health needs of people working from home.
- Thirty-eight percent of smaller firms and 58% of larger ones provided or expanded on-line counseling services for emotional or financial distress, relationship issues or other stressful situations.
Many of those workers have, no doubt, faced financial stress — especially in the face of rising inflation across all sectors of the economy. As GOBankingRates previously reported, even a recent bump in wages hasn’t been enough to offset higher costs. According to the U.S. Department of Labor, top-line inflation for October was nearly 1%, while average hourly earnings for the month only increased 0.4%. The Bureau of Labor Statistics estimates that real average hourly earnings actually decreased 0.5% in October.
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Americans strapped by skyrocketing health-insurance premiums might have to look for ways to cut health-care costs in other areas. Here are some options:
- Save on medications by choosing generic prescriptions, looking for less expensive over-the-counter brands or buying in bulk through a mail-order service.
- If you don’t have any chronic or pre-existing medical conditions, consider choosing a high-deductible insurance plan if your employer offers one. You’ll likely have to pay a lot of money out-of-pocket before the insurance kicks in, but you will also have much lower premiums.
- Take preventive health measures to reduce your risk of illness. This includes using your benefits for routine check-ups and screenings as well as eating healthier, exercising regularly and lowering your consumption of harmful substances such as alcohol.
- Take advantage of any health spending accounts or flexible spending accounts your employer offers. These work like savings accounts that let you set aside pre-tax money for health care expenses, which can lead to hundreds of dollars in savings every year.
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