August 14th, 2024 – A recent study from the Kaiser Family Foundation showed that premiums for employer sponsored health insurance trended with the general rate of inflation. Over the last 5 years, general inflation increased 21%, wages increased 27% and employer health insurance premiums increased an average of 22%.
Most employees contribute a share of the premium. Employees of smaller firms contributing 38%, which is higher than the 25% average contribution by employees of larger firms. The average deductible in 2023 for small firms was $2,434 vs $1,478 for large firms.
In 2023, the average total premium rose 7% with employee only coverage running $8,435 annually and family coverage running $23,968 annually. In 2025, rate filings with the Colorado Division of Insurance indicate an expected average increase of 8% in the small group health insurance market.
In the last 20 years there have been over 1,000 mergers in the hospital sector and the consolidation of hospitals has been a contributing factor in overall healthcare cost inflation. The hospital mergers have decreased competition and increased costs to local businesses in the form of higher insurance premiums and to employees in the form of higher out of pocket costs.
A recent report cited by the Wall Street Journal looked into the impact of 300 hospital mergers and how it impacted local wage earnings and unemployment. The study showed that for every price increase of 1% by hospitals that unemployment also rose and tax revenue in local economies fell.
Zack Cooper, a health economist at Yale said, “The economic hit applies to any price increase that patients pay without getting any more benefit in return.”
