Expect Higher Health Insurance Premiums, but Not a Lot Higher

Premiums for job-based health insurance may rise next year, although employers may not pass on the full increase for fear of alienating their workers, analysts say.

More than half of Americans get health insurance through an employer, and many plans are now in the midst of open enrollment, when workers can sign up for coverage or change options for the coming year. (Open enrollment is also underway on government health insurance exchanges for people who lack workplace coverage.)

Average premiums this year for employer-sponsored family health insurance barely budged from last year, according to a report from the Kaiser Family Foundation. But a surge in inflation this year, plus a return by patients to pre-pandemic levels of doctor visits, suggest that bigger increases are coming.

“The inflation experienced throughout the economy in 2022 may push prices up, leading to premium increases in the upcoming year,” said the Kaiser report, which is based on a survey of more than 2,100 randomly selected employers from February to July.

Employers surveyed by human resource consultants like Mercer and WTW estimated that their health care costs will increase 6% on average next year. But employees might see more modest increases in their paycheck contributions for insurance. While the job market is softening somewhat, employers may still be concerned that if they push the costs too high, workers will leave and take another job, said Gary Claxton, a senior vice president at the Kaiser foundation.

“You don’t want employees to be unhappy about their benefits,” he said.

In WTW’s survey of 455 employers, just a quarter said they planned to shift costs to workers through higher premium contributions.

Workers on average pay more than a quarter of the cost of health insurance premiums, with employers paying the rest. This year, the average annual premium for family coverage was $22,463, up 1% from $22,221 last year, Kaiser found. On average, workers this year are paying $6,106, or about $509 per month, as their share of family coverage.

But workers at small employers — those with fewer than 200 workers — pay nearly $2,000 more a year on average than workers at larger firms, Kaiser found.

A majority of employers said they wouldn’t shift costs to workers by raising deductibles (the amount that employees must pay before insurance coverage starts) or copayments (a fixed amount paid by workers when they visit a doctor), Mercer found. This year, Kaiser said, the average deductible for single coverage is $1,763 — similar to last year but up by nearly $1,100 since 2012 — and copayments average $27 for primary care and $44 for specialists.

Workers are likely to see more options for mental health care — but they may have to wait for appointments. Employers reported growing demand for mental health services, Kaiser found, and more than a quarter of large employers said they had added mental health providers to their networks, whether for treatment in person or online. Even so, about 30% said their networks lacked enough mental health professionals to give workers timely access to care.

For people who don’t have insurance through a job and don’t qualify for government programs like Medicare or Medicaid, open enrollment on HealthCare.gov, the federal health insurance marketplace, began Tuesday. Open enrollment is also underway, or soon will be, in the 17 states (plus the District of Columbia) that run their own exchanges.

The good news is that expanded financial help with premiums, first made available as part of the federal government’s pandemic relief program, was extended through 2025 by Congress as part of the Inflation Reduction Act. As a result, the “vast majority” of people buying insurance on the Affordable Care Act marketplace get subsidies that lower their premiums, a separate Kaiser report found.

The Centers for Medicare and Medicaid Services, the agency that oversees HealthCare.gov., said four out of five customers could find plans for $10 per month or less, after tax credits.

Plus, the “family glitch” loophole, which kept some members of lower-wage workers’ families from qualifying for financial help with marketplace premiums, has been fixed for 2023.

People who don’t qualify for marketplace subsidies may see premiums increase next year by an average of 4% for a benchmark plan, a change from recent year-over-year declines. But because of the extension of more generous subsidies, people who haven’t qualified for financial help before may be eligible now, so they should shop online to see if it makes sense to change plans.

“Folks should be encouraged to come back and see what they qualify for,” said Katie Keith, director of the health policy and the law initiative at Georgetown University Law Center.

Here are some questions and answers about open enrollment:

How long does workplace open enrollment last?

Open enrollment for workplace plans varies, but periods of two to four weeks are typical. If you are unsure of your employer’s deadline, check with your human resources office.

How long does open enrollment for marketplace coverage last?

Shoppers have until Jan. 15 to select a plan on HealthCare.gov for 2023. (If you want coverage to start Jan. 1, you generally must enroll by Dec. 15.) If you miss the deadline, you can generally qualify for a “special” enrollment period if you have a life change, like getting married or divorced or losing your job. Also, certain people with low incomes can enroll in marketplace plans year-round.

Some state-run marketplaces have different start and end dates, so check their websites for details. New York’s enrollment period for 2023 coverage, for instance, starts Nov. 16, but people can continue to sign up until Nov. 15 for coverage for the remainder of this year, said Cadence Acquaviva, a state health department spokesperson.

Where can I get help choosing marketplace health insurance plans?

Funding for “navigators” who can assist with evaluating options has been greatly increased. You can search online for local help. To see if you qualify for subsidies, try Kaiser’s online marketplace calculator.

Open enrollment is a fertile time for fraud, according to the Better Business Bureau. Be wary of unsolicited calls or texts proposing deals on health insurance or seeking personal information, and contact the marketplace directly to confirm if a call is legitimate. HealthCare.gov offers advice for avoiding health care scams, as does the Federal Trade Commission.