Employee Health Insurance Costs Climb Despite Lower Inflation

Inflation may be waning, but Americans aren’t seeing much relief when paying for medical care.

Employer-sponsored health insurance costs climbed 7% for the second year in a row, a growth rate unseen in more than a decade, The Wall Street Journal (WSJ) reported Wednesday (Oct. 9), citing data from healthcare nonprofit KFF.

According to the report, these increases have added upwards of $3,000 to the average family premium, which came to about $25,500 this year.

Employers absorbed this year’s higher premium costs, as a sign that businesses are cognizant of how much their workers can afford, Matthew Rae, associate director of the KFF healthcare marketplace program, told the WSJ.

This year, employers spent about $1,880 more, with the average cost for family premiums coming to $19,276. Employees’ share of the average family premium fell roughly $280 from last year, to $6,296.

But this system is not sustainable for companies, said Shawn Gremminger, CEO of the National Alliance of Healthcare Purchaser Coalitions, who argued that workers will eventually bear these costs through things like job cuts or smaller wage increases.

“That’s adding real stress to the economy,” Gremminger said.

To help workers afford health coverage, the WSJ said, some larger companies have begun reducing insurance costs for low-wage workers. In addition, close to 20% of these companies are also offering their lower-paid employees alternative health plans that provide fewer benefits and lower premiums.

PYMNTS has spent much of this year chronicling the challenges Americans face when paying for healthcare, with a special focus on the challenges women face.

Research from the PYMNTS 2024 Women’s Wellness Index Report shows that women are disproportionately burdened by medical costs, with 15% of women living paycheck to paycheck naming healthcare bills as a chief reason for their financial troubles.

That’s compared to just 12% of men, a disparity that showcases the gendered nature of economic vulnerability in healthcare.

The situation is even more severe for women who struggle to meet their monthly bills, with 23% saying medical costs are a key factor in their financial difficulties, while the figure for men is notably lower at 18%.

At the same time, the research found that women are 11% more likely than men to research aspects of health and wellness on their own and are 19% more likely to understand how to determine the best medical and wellness providers.

“This may explain why single women living alone have some of the best health outcomes, scoring 20% better than the average woman on our index,” PYMNTS wrote.

“Why? Our data shows that healthcare needs of children or significant others can take precedence — with major impacts on women’s health outcomes.”