Health insurance outpaces pay gains in 2021
Paying for health insurance got more expensive for everyone this past year.
Those increases show no signs of abating.
Family premiums rose by 4 percent in 2021 – topping $22,000 annually, according to the 2021 benchmark Kaiser Family Foundation Employer Health Benefits Survey. Both employees and employers saw their share of that cost increase in 2021. The average annual premium rose to $22,221, with employees picking up $5,969 of that cost.
The change in premiums roughly matches the 5 percent year-to-year rise in workers’ wages and inflation of 1.9 percent. What workers and employers pay toward premiums over time has risen more quickly. Since 2011, average family premiums have increased 47 percent, more than wages, 31 percent, or inflation, 19 percent.
The average single deductible stands at $1,669 for workers who have one, similar to the average in each of the past two years ($1,644 in 2020; $1,655 in 2019) but up significantly since 2011 ($991). This year, 85 percent of covered workers have a deductible in their plan, up from 74 percent a decade ago.
Among large employers, those with at least 200 workers, half report that health care utilization among plan enrollees has been about what they expected for the most recent quarter. More say utilization has been below expectations, 32 percent, than above it, 18 percent, consistent with other data showing a slowdown in total health spending during the COVID-19 pandemic.
Many employers reported expanding their wellness programs for employees, as well as offering expanded telehealth and mental health services. The most common changes involve expanding online counseling services, expanding or changing existing programs to better meet the needs of people working from home and adding a new digital program such as an app.
No Surprise Act takes aim at sticker shock
Consumers will have new federal protections from surprise medical costs in 2022 as The No Surprises Act (NSA) finally takes effect.
Surprise medical bills arise when insured consumers inadvertently receive care from out-of-network hospitals, doctors or other providers they did not choose. In recent years, multiple studies found this happens in about 1 in 5 emergency room visits. In addition, between 9 percent and 16 percent of in-network hospitalizations for non-emergency care include surprise bills from out-of-network providers (such as anesthesiologists) whom the patient did not choose.
Surprise medical bills pose financial burdens on consumers when health plans deny out-of-network claims or apply higher out-of-network cost sharing; consumers also face “balance billing” from out-of-network providers that have not contracted to accept discounted payment rates from the health plan.
The federal government estimates the NSA will apply to about 10 million out-of-network surprise medical bills a year and protect consumers from surprise medical bills by:
- requiring private health plans to cover these out-of-network claims and apply in-network cost sharing. The law applies to both job-based and non-group plans, including grandfathered plans.
- prohibiting doctors, hospitals, and other covered providers from billing patients more than in-network cost sharing amount for surprise medical bills.
Health care by the numbers
Annual premiums for employer-sponsored family health coverage reached $22,221 this year, up 4 percent from last year, with workers on average paying $5,969 toward the cost of their coverage. The average deductible among covered workers in a plan with a general annual deductible is $1,669 for single coverage. Fifty-eight percent of small firms and 99 percent of large firms offer health benefits to at least some of their workers, with an overall offer rate of 59 percent.