Healthcare insurance premiums remained stable in 2022 compared to 2021 but might surge next year because of inflation and the demands of employees for better mental health coverage, according to the Kaiser Family Foundation’s “2022 Employer Health Benefits Survey.”
“Demand” might be the right word, given the competition among employers for workers in a tight labor market.
KFF President and CEO Drew Altman said in a press release accompanying the survey that this reprieve from rising premiums might just be “the calm before the storm, as recent inflation suggests that larger increases are imminent. Given the tight labor market and rising wages, it will be tough for employers to shift costs onto workers when costs spike.”
Employer-sponsored coverage cost an average of $22,463 per family in 2022, a very slight increase from the $22,221 it cost in 2021. What also sets this premium increase apart from previous year-over-year changes is that it’s less than the increase in inflation (8%) or wages (6.7%). That good news should be taken in context for several reasons, though, including the fact that premiums have risen an average of 20% over the last five years, according to KFF.
Other troubling trends litter the survey, one being a growing disparity between the coverage offered to employees depending on the size of the company that they work for.
Employees at larger companies that employ 200 or more individuals are much more likely to pay less than those working for smaller companies. Workers at smaller companies pay on average $7,556 per year for family coverage compared to the $5,580 individuals at larger companies must pay.
For single coverage, the premiums employees pay at smaller and larger companies are about the same, but those working for smaller firms pay more in deductibles: $2,543 versus $1,493. In other words, 49% of employees at small firms pay an average deductible of at least $2,000; only about 25% of those working for larger firms do.
Age also plays a part in coverage. Premiums are lower in larger companies in which at least 35% of the workers are age 26 or younger ($7,341) than they are in companies with a smaller share of younger workers ($7,978).
In companies in which 35% of the workforce is 50 or older, the premiums are higher ($8,252) than in companies with a smaller share of older workers ($7,579).
In companies in which at least 35% of workers make $30,000 a year or less, the premiums are lower than in companies that have fewer individuals with that salary.
COVID-19 may have fueled a greater demand for mental health coverage, with nearly half (48%) of large employers noting an increased number of workers using mental health services, while 29% say that more employees request family leave because of mental health issues.
Hoangmai (Mai) H. Pham, M.D., president and CEO of the Institute for Exceptional Care, a not-for-profit healthcare advocacy organization for people with intellectual or developmental disabilities, recently told Fierce Healthcare that “mental illness is having a moment in the policy world right now. And that’s great—to the extent that it brings more resources or brings more policy attention to it.”
According to the KFF survey, “more than a quarter (27%) of large employers this year added mental-health providers—either in physical offices or virtually through telehealth—to their plan’s networks to expand access. Even with those additions, three in ten (30%) large employers say their networks do not have enough behavioral health providers to ensure their workers have timely access to care.”
Pham focused on the dearth of mental health specialists in an article she co-wrote for Health Affairs which calls for at least a 30% pay increase for primary care physicians.
“The reality is that most people get their mental healthcare from primary care practice,” said Pham, whose background includes being one of the founding officials of the Center for Medicare and Medicaid Innovation and working as co-director of research at the Center for Studying Health System Change. “There are never going to be enough mental health specialists. If you want to solve this problem, you must invest in primary care, because right now, primary care practices do not have the time to adequately provide mental health support. They do what they can. They are the place where most people go to access it, but they’re running on a treadmill.”
Forty-three percent of employers expressed concern about the growth of substance abuse among workers, with 14% saying that employees use more services for that problem. A smaller share of large employers said they have seen an increase in the share of workers using substance use services (14%), while more than 4 in 10 (43%) said that they are at least somewhat concerned about the growth of substance use conditions among their workers.
KFF conducted the survey between February and July of 2022, and included 2,188 randomly selected, nonfederal public and private firms with three or more employees. An additional 2,917 firms responded to a single question about offering coverage.