Health insurance premiums increased more than wages this year


The average annual health insurance premiums for family coverage for employer-sponsored health plans has topped $20,000 for the first time, according to data from the Kaiser Family Foundation's annual employer benefits survey.

On top of higher premiums, deductibles and other out-of-pocket expenses are also on the rise for over half of the non-elderly U.S. population covered by employer insurance.

Here are some of the key takeaways from KFF's report:

Premium increases have outpaced wage growth

The average annual premiums for single coverage in 2019 are $7,188, and $20,576 for family coverage for workers covered by their employer's plan. That's a 4% and 5%, respectively, increase over 2018. At the same time, wages increased by 3.4% and inflation by 2%.

"The average premium for family coverage has increased 22% over the last five years and 54% over the last ten years, significantly more than either workers' wages or inflation," the report notes.

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Workers don't pay that full amount, but the portion they are on the hook for is also steadily increasing. Singles will pay $1,242 this year, on average, while families will pay $6,015, an increase of 71% in the past decade. Earnings have grown by 26% during the same time frame.

Premiums vary by coverage, plan type and firm size.

Deductibles are also rising

As premiums have steadily risen, so has the share of insured who pay a deductible. Workers who have deductibles must pay, typically, thousands of dollars out-of-pocket, on top of their monthly premiums, before their coverage kicks in.

The number of people with employer-sponsored insurance who have deductibles has increased from 63% to 82% in the past 10 years, and the deductibles have risen from $826 to $1,655, on average.

What's more, the share in High Deductible Health Plans, defined as having a deductible of at least $1,350 for single coverage and $2,700 for family coverage, is also increasing. As the report notes, the percentage of workers with an annual deductible of $2,000 or more for single coverage has grown from 18% to 28% over the past five years.

Deductibles vary by coverage, plan type and firm size.

Other costs stay steady

On top of premiums and deductibles, many workers must also pay a set dollar amount or percentage of the covered amount when they visit an in-network doctor or are admitted to a hospital. Both of these have remained close to the 2018 figures.

Many plans have an in-network limit on the total amount of money a worker will pay for out-of-pocket costs, including the deductible and copays. This varies widely by employer and coverage type.

Costs will increase more next year

Workers can expect their costs to rise again in 2020, according to a separate report from the National Business Group on Health.

Total, employees of large companies "are expected to shoulder about $4,500 in costs next year, including out-of-pocket spending," CNBC reported. Employers, too, will pay more to cover workers.

Don't miss: Your health insurance costs are about to go up in 2020

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