Premiums remained steady in 2022, but increases in 2023 likely
In 2022, the average annual premium for family coverage in an employer-sponsored health plan was $22,463, according to a report from the Kaiser Family Foundation.. For single coverage, the cost was $7,911, and both findings were similar to last year’s annual premiums.
With wages increasing 6.7% and inflation increasing 8%, the lack of change may be because 2022 premiums were finalized before the extent of rising prices was fully known, according to the report. As inflation continues to increase, higher premiums for 2023 are possible.
Overall, the average premium for family coverage has increased 20% over the last five years and 43% over the last ten years.
The KFF report found that covered workers at small and large firms have similar premiums for single coverage ($8,012 vs. $7,873) and family coverage ($22,186 vs. $22,564). The average premiums for covered workers in high-deductible health plans with a savings option (HDHP/SO) are lower than the overall average premiums for single coverage ($7,288) and family coverage ($21,136)
For workers enrolled in PPOs, average premiums are higher than the average for single ($8,272) and family coverage ($23,426).
On average, workers contribute 17% of the premium for single coverage and 28% of the premium for family coverage, similar to the percentages in 2021. Covered workers at small firms contribute, on average, a higher percentage of the premium for family coverage than those at large firms (36% vs. 26%). As a result, the average contribution amount for covered workers in small firms ($7,556) is higher than the average contribution amount for covered workers in large firms ($5,580). Covered workers at private for-profit firms contribute a higher percentage of the premium for both single and family coverage than those at other firms, on average, while covered workers at public firms contribute a lower percentage of the premium for both single and family coverage.
When it comes to contributions, what workers pay varies. Thirty-three percent of covered workers at small firms are enrolled in a plan where the employer pays the entire premium for single coverage. This is the case for only 6% of covered workers at large firms. However, 31% of covered workers at small firms are in a plan where they must contribute more than half of the premium for family coverage, compared to 7% of covered workers at large firms, according to the report.
The average annual dollar amounts contributed by covered workers in 2022 are $1,327 for single coverage and $6,106 for family coverage, similar to the amounts last year. Nine percent of covered workers, including 21% of covered workers at small firms, are in a plan with a worker contribution of $12,000 or more for family coverage.
PPOs remain the most common plan type, with 49% of covered workers enrolled, 29% are in a high-deductible plan with a savings option (HDHP/SO), 12% in an HMO, 9% in a POS plan, and 1% in a conventional (also known as an indemnity) plan.
The report found that most covered workers must pay a share of the cost when they use health care services. Eighty-eight percent of workers with single coverage have a general annual deductible that must be met before most services are paid for by the plan.
Among workers with single coverage and a general annual deductible, the average deductible amount is $1,763, similar to last year. The average deductible for covered workers is much higher at small firms than large firms ($2,543 vs. $1,493). Among workers with single coverage and any deductible, the average deductible amount has increased 17% over the last five years and 61% over the last ten years.
In five years, the percentage of covered workers with a general annual deductible of $2,000 or more for single coverage has grown from 22% to 32%.
Regardless of their deductible, most covered workers also pay a portion of the cost when they visit an in-network physician. Many covered workers face a copayment (a fixed dollar amount) when they visit a doctor, although some workers instead have coinsurance requirements (a percentage of the covered amount). Average copayments are $27 for primary care and $44 for specialty care physician appointments, while average coinsurance rates are 19% for primary care and 20% for specialty care. These amounts are similar to those observed in 2021.
Most workers also face additional cost sharing for a hospital admission or outpatient surgery. Sixty-eight percent of covered workers have coinsurance requirements and 13% have a copayment for hospital admissions, the report found. The average coinsurance rate for a hospital admission is 20% and the average copayment amount is $344 per hospital admission. The cost sharing requirements for outpatient surgery follow a similar pattern to those for hospital admissions.
Virtually all covered workers are in plans with an annual limit on in-network cost sharing (called an out-of-pocket maximum) for single coverage, though these limits vary significantly. Among covered workers in plans with an out-of-pocket maximum for single coverage, 8% are in a plan with an out-of-pocket limit less than $2,000, while 26% are in a plan with a limit of $6,000 or more.