Health insurance costs for family coverage in the United States have surged significantly in 2023, with average expenses reaching $27,000. A survey by KFF highlighted that employers are responsible for approximately 75% of this cost. Despite this coverage, workers face increased financial burdens due to rising deductibles and premiums.
Rising Costs Impacting Workers
This year, employees contributed an average of $6,850 towards family health insurance. This figure translates to nearly $600 per month, putting a strain on many households. Alongside premiums, many workers are also dealing with higher deductibles, which can result in substantial out-of-pocket expenses if health issues arise.
- Average family health insurance cost: $27,000
- Employer contribution: 75%
- Employee contribution towards family coverage: $6,850
- Number of Americans under 65 with employer-based insurance: 180 million
Concerns About Affordability
The affordability of health insurance is becoming increasingly concerning. Lisa Hunter from United States of Care stated the outlook does not appear to improve. Workers lack options to mitigate rising costs, leaving them vulnerable to financial strain.
Many Americans are already facing substantial out-of-pocket expenses for medical visits and prescriptions. Recent data indicates that health insurance costs consume about 10% of the median household income in 2023, leading to reduced healthcare utilization and rising medical debt.
Employer Challenges and Rising Drug Costs
Rising drug prices significantly contribute to overall health insurance costs. The KFF survey found that nearly 50% of large employers provide coverage for popular GLP-1 medications. This coverage increased from 28% in the previous year, indicating a growing acceptance of expensive treatments.
Companies with fewer than 200 employees face even steeper challenges. They often encounter higher premiums, and many employees pay more for their insurance compared to those in larger corporations. Over a quarter of employees in small businesses reported annual contributions exceeding $12,000 for family coverage.
- Percentage of small employers offering health benefits in 2025: 54%
- Percentage of small business employees with annual deductibles over $2,000: Over 50%
Small employers are exploring alternative insurance options, such as level-funded plans, which may not cover all required benefits. The reliance on these plans could pose risks to traditional insurance markets, potentially leading to a concentration of high-cost patients.
Shifts in Coverage Options
Many small business employees are opting for plans available through the Affordable Care Act, reflecting the limited options in their workplaces. About half of those enrolled in such plans are from small businesses that do not offer their own coverage.
Additionally, a significant number of small employers are recognizing the importance of Medicaid as a critical insurance source for their workforce. This highlights the reliance on state-federal programs for low-income workers, reinforcing the need for expanded coverage options in the insurance market.
