Prepare for Healthcare Costs To Spike In 2023 and Beyond as They Catch Up to Inflation
Fuel, rent, groceries — what will inflation come for next? Healthcare.
According to the Kaiser Family Foundation (KFF) 2022 Employer Health Benefits Survey, a large number of the premiums for 2022 were set in the fall of 2021, a full year before inflation struck so deeply and so widely. This means that healthcare premiums have some catching up (with inflation) to do.
“As inflation continues to grow at relatively high levels, we could potentially observe a higher increase in average premiums for 2023 than we have seen in recent years,” the survey, which consulted 2,188 randomly selected non-federal public and private employers with three or more workers from February through July, said.
The KFF survey isn’t the only research to herald the anticipated impact of inflation in the healthcare sector. An in-depth report from the McKinsey & Company published in September estimated that “the annual U.S. national health expenditure is likely to be $370 billion higher by 2027 due to the impact of inflation compared with prepandemic projections.”
The McKinsey report also noted that healthcare supply input costs, which spiked in late 2020 and 2021, continue to be above the norm and that growth in labor costs are staying high.
The KFF survey found that the average premium for family coverage has increased 20% over the last five years and 43% over the last 10.
The Affordable Care Act (ACA) marketplace will not be spared soaring prices. According to the Center for Medicaid and Medicaid Services Center for Consumer Information & Insurance Oversight, 2023 premiums will rise by 4% for a 27-year-old for a silver benchmark marketplace plan available on HealthCare.gov.
This 4% estimate is lower than the average proposed premium increase for ACA marketplaces across 72 insurers in 13 states and the District of Columbia, which hovers at 10% higher than in recent years, according to projections by the Peterson-Kaiser Health System Tracker.
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