Health care costs for employers are expected to rise 6.5% next year, report finds
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- US Employer Paid 6.5% increase Average employee health insurance coverage in 2023 compared to this year, according to an Aon report released Thursday.
- The latest rate of increase is a sharp jump from 3.7% growth in employer costs over 2021-2022, but still well below the inflation-reflective figure of 9.1% for the CPI. increase.
- Due to the multi-year nature of contracts between providers and insurers, inflation typically affects health care costs later than other goods and services, according to the report. It will become more common throughout the year.
Most industries can directly pass on consumers the higher prices they pay for materials and other resources when inflation hits, but health care providers are bound by years of contracts with insurance companies. It is
It’s unclear how long it will take for inflation to be fully reflected in health care costs, but it could be years. Most insurance policies are renegotiated, according to the Kaiser Family Foundation and Peterson reports.
“In contrast to the stark contrast of decades past, U.S. employer health care budgets are measuring nearly a third of the consumer price index this year,” said Aon’s head of health solutions. Debbie Ashford, North America Chief Actuary, said. mentioned in the release.
Still, employers will feel the effects of inflation as health insurance costs rise significantly next year than in years past. The report is based on Aon data from approximately 700 US employers.
In the first year of the pandemic, medical claims were dampened as patients skipped or delayed treatment amid stay-at-home orders and reluctance to visit medical sites. Claims have slowly returned to more typical levels for employers, according to the report.
This report does not detail the increase in health insurance costs that employees expect in 2023.
This year, On average, employees contribute about $4,412 to premiums, according to Aon, with $2,520 paid through payroll premiums and the remaining $1,892 paid through deductibles, copayments, and coinsurance. It is