Employer health coverage costs still outpace wages
The cost of job-based health insurance averaged more than $21,000 for families and almost $7,500 for individuals in 2020 — roughly 4% higher than 2019, according to new survey data from the Kaiser Family Foundation.
The big picture: These costs only accounted for coverage offered heading into 2020, and therefore didn't factor in the coronavirus pandemic. And although the 4% growth rate was the lowest since 2017, it still exceeded the average growth of workers' wages (3.4%) and general inflation (2.1%) — meaning employer health care continues to eat away at people's budgets.
Between the lines: Employers did not alter their health benefits a lot, and fewer than 10% of companies switched insurance companies, according to KFF's survey.
Yes, but: Family health coverage still costs as much as a new car or compact SUV, every year.
- Employers are footing three-quarters of the cost, which workers don't really see.
- These coverage costs also don't account for out-of-pocket spending like deductibles and coinsurance, which have risen steadily over the past decade.
What we're watching: Companies are offering 2021 coverage to their employees right now, and final numbers won't be out until this time next year.
The bottom line: If you get your health insurance through work — as a plurality of Americans do — it continues to consume more of your compensation because of the high prices and administrative costs throughout the health care system.