Employer-Provided Health Insurance Premiums

Goals

To determine the total employer-provided health care premium market in the United States, including past and projected growth rates for the future.

Early Findings

  • In 2018, the average annual premium for employer-based family coverage was $19,616 and $6,896 for single coverage. In 2019, data from the Kaiser Family Foundation (KFF) shows that this figure had risen to $20,486 for family coverage and $6,972 for single coverage.
  • Data from the KFF also shows that in 2015, the average annual premium for employer-based family coverage was $17,322 and $5,963 for single coverage.
  • For single coverage, employers bear 79% of the premium cost, while they bear 72% of the premium cost for family coverage.
  • For 2020, "U.S. employers are predicting that their health care costs for 2020 will rise a median of 6 percent if they don't make any cost management adjustments, and by 5 percent if they adopt cost management initiatives, such as alternative network models, or renegotiate their contracts, a new survey shows." They estimate that "the total cost of health care, including premiums and out-of-pocket costs for employees and dependents, will rise to $15,375 per employee in 2020, up from $14,642 per employee in 2019." [We reckon that the coronavirus pandemic has put paid on this prediction.]
  • As of 2019, only 57% of all United States firms offered health benefits.
  • According to an article by PeopleKeep, the "average premium for family coverage has increased 22% over the last five years and 54% over the last ten years, significantly more than either workers’ wages or inflation." This growth rate was also confirmed in an article by the Harvard Business Review (HBR).
  • As of the fourth quarter of 2019, there were 158.63 million employed people in the United States. Of this number, 46.06 million were married men with a spouse present and 36.62 million were married women with a spouse present, for a total of 82.68 million married people in the American workforce. This brings the number of single people in the workforce at 75.95 million (158.63 - 82.68).
  • Between 2015 and 2025, the Centers for Medicare & Medicaid Services (CMS) projects that health spending will increase at an average rate of 5.8% per year.

Summary of Early Findings

  • Our early findings indicate that data the total employer health care premium market in the United States may not exist in the public domain.
  • While the overall past and future growth rate of the market may also not exist in the public domain, early findings on how much premiums have grown in the last five and ten years provide useful insights on how much the market may have grown since the size of the market is primarily dependent on the cost of premiums and the workforce population (which also grew in the last ten years).
  • Given the aforementioned, we propose the next steps listed below.

Proposed next steps:

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