The average annual health insurance plan for families has risen to $24,000 – the cost of a small car – as inflation drives up premiums

The cost of health insurance rose this year by the largest amount since 2011, as inflation continues to impact all corners of the U.S. economy.

A 7 percent increase in the cost of an employer-sponsored family plan brought the average premium to nearly $24,000, according to an annual survey. questionnaire by nonprofit healthcare research organization KFF.

And employees pay a substantial part of that premium themselves: an average of about 27.5 percent this year.

That averaged $6,575 for their share in 2023, about 8 percent more than last year. That’s nearly double the rate of inflation, according to data from the Bureau of Labor Statistics.

According to the KFF report, these prices are likely to continue to rise. Nearly a quarter of companies said they will increase employee contributions over the next two years.

According to the study, employees would pay an average of about 27.5 percent of their employer-sponsored health care premiums in 2023

In the case of health plans with single coverage, costs rose by 6.6 percent, just over $500, to $8,435 in 2023, according to the study. With separate plans, employees also paid a smaller share of their premiums: just under 17 per cent.

According to the KFF report, approximately 153 million Americans receive health insurance through their employers.

“We definitely saw a big jump in employer premiums this year,” said Matthew Rae, associate director of KFF’s Health Care Marketplace Program and co-author of the report.

“For a family of four, you’re actually giving pretty close to what a new car costs, just for a year, to keep everyone covered,” he said.

Rae attributed the rising cost of health insurance more broadly to inflation, noting that the pressures caused by rising costs are passed on to both employers and employees.

“Both employees and employers will ultimately have to foot the bill for these higher costs,” he said.

Although inflation has fallen from a high of nearly 9 percent in June 2022, it is still above the Federal Reserve’s target of 2 percent.

The consumer price index rose 3.7 percent in the 12 months through September, according to Bureau of Labor Statistics data released earlier this month.

But on the plus side for employees is the fact that employers are not increasing the deductible, which is the amount a covered person must initially pay out of pocket before the insurer makes a contribution.

The average annual deductible is approximately $1,735 among workers who have a deductible for single coverage.

Despite minor fluctuations, the share of family health insurance paid by employees has also remained fairly consistent over the past two decades. Rae suggested that fluctuations could possibly be attributed to uncertainty in the research

Pictured is a Kaiser Permanente health center. It is one of the largest healthcare companies in the US

According to KFF, the steady levels of deductibles are a reflection of employers wanting to keep out-of-pocket costs low for their employees.

“Employers are spending all this money on health insurance because they want to recruit and retain the best employees possible.” Rae said. “Now is not the time, if you want to, to tamper with the coverage you provide.”

Last month, the Bureau of Labor Statistics announced that the U.S. economy added 336,000 jobs in August, nearly double analysts’ expectations. This led to fears that inflation is still out of control.

Despite minor fluctuations, the share of family health insurance paid by employees has also remained fairly consistent over the past two decades.

“Premiums have roughly doubled since 2008, but the way that bill is spilled hasn’t really changed,” Rae said. He suggested that these fluctuations could possibly be attributed to the uncertainty in the research.

But he said: ‘Many employers told us they planned to increase employee contributions over the next two years.

The report also shows that, on average, employees in small businesses contribute a much higher percentage of the premium for family coverage than employees in large companies: 38 percent instead of 25 percent.