(NewsNation) — Insurance premiums for nearly everything, including employer-provided health insurance expenses, are skyrocketing in 2023, in part because of inflation.
In 2023, the average family premiums rose by 7%, after nearly no change in 2022, according to a report by KFF, a nonprofit that researches health care issues. For families, this translates to an average cost of more than $6,500, which is about $500 more than last year.
“If they’re seeing their premiums go up 7%, they may have to make a decision as to what they might want to do differently next year,” said Paul Fronstin, the director of health research benefits for the Employee Benefit Research Institute. “Oftentimes, you could boil that down to a choice between a high deductible and a low deductible plan.”
KFF noted that premiums climbed roughly with wages and inflation.
In August, consumer price data revealed a 19 percent increase in car insurance costs compared to last year. This increase is due to supply chain constraints, labor costs and inflation.
Researchers at the Consumer Federation of America assert companies have the ability to raise rates based on various factors such as education, ZIP code, marital status and even credit score.
“Our research has found that if you are a good driver, but you have poor credit, you can get charged hundreds, sometimes even thousands of dollars more for auto insurance, even if your driving record is perfect,” said Michael Delong of the Consumer Federation of America.
The Consumer Federation of America is working to dissuade companies and states from employing these practices, including price optimization, where insurers set rates based on what they believe you’re willing to pay. It’s important to note that this practice is illegal in certain states.
There are steps consumers can take, such as filing a complaint, as insurance companies are overseen by state regulations. Additionally, it’s advisable to explore various insurance options and shop around to find the best rates for your needs.
Fronstin said health care provider consolidation also can drive up care costs, which ultimately affects premiums.
He also thinks the U.S. health care system — with its limited capacity to treat people — is still catching up on providing care that was delayed during the COVID-19 pandemic.
Later this fall, companies begin their annual coverage enrollment window for 2024, and health care experts say another price hike could be coming.
The Associated Press contributed to this report.
