- American employers will pay 6.5% more average for employee health care coverage in 2023 compared to this year, according to an Aon report Thursday.
- The latest forecast increase, while a jump from the 3.7% increase in employer costs between 2021 and 2022, is still well below the consumer price index of 9.1%, a figure that reflects inflation.
- Inflation typically hits health care costs later than other goods and services because of the multiyear nature of contracts between providers and insurers, but the impacts will become more widespread over the course of the year, according to the report.
While most industries are able to pass higher prices they pay for materials and other resources directly to consumers when inflation hits, health care providers are locked into multi-year contracts with insurers.
It is unclear how long it will take for inflation to be fully reflected in health care costs, although it is likely it takes several years until most insurance contracts have been renegotiated, according to a report by the Kaiser Family Foundation and Peterson.
“In stark contrast to the past few decades, we’re estimating that health care budgets for American employers will be nearly three times lower than the Consumer Price Index this calendar year,” Debbie Ashford, North America chief actuary for health solutions at Aon. said in an announcement.
But still, some inflationary effects will be felt by employers next year as they see larger increases in health plan costs than in years past. according to the report, based on Aon data from about 700 US employers.
In the first year of the pandemic, medical claims were shut down as patients skipped or delayed care amid stay-at-home orders and reluctance to visit medical facilities. Claims have slowly returned to more typical levels for employers, according to the report.
The report did not detail expected employee health care plan cost increases in 2023.
However, this year, employees contribute an average of about $4,412 for coverage, with $2,520 paid through premiums from paychecks, and the remaining $1,892 paid through deductibles, copayments and coinsurance, according to Aon.