Employer health benefit costs are projected to rise 8.2% next year, the steepest jump since 2003. That figure already assumes companies take action to hold it down. Without those measures, employers said the increase would run closer to 11%. The measures in question are mostly one thing: moving the cost onto you.
What Workers Will Actually Pay
Employees are forecast to spend about $3,130 on premiums next year and another $2,167 out of pocket, roughly $5,300 in total. That is up 7.9% from $4,909 this year.
For context, average hourly earnings rose 3.1% over the past twelve months. The health line is growing at more than double the pace of the paycheck it comes out of.
How the Cost Gets Moved
About 59% of employers say they plan changes such as raising deductibles. Roughly two thirds of large employers expect to increase the employee share of premiums outright.
Those are two different levers and they land differently. A higher premium share hits every paycheck whether or not you use the plan. A higher deductible costs nothing until the year you get sick, and then it costs a great deal at once. Employers tend to prefer the deductible, because it is less visible at enrollment.
Why the Underlying Number Keeps Climbing
Three drivers come up repeatedly. Treatment for serious illness, cancer in particular, has gotten more expensive per case. Hospital and provider consolidation has reduced the number of systems in a given market, which strengthens their hand in price negotiations with insurers. And prescription costs keep rising, with GLP-1 drugs now a large enough line to move the total on their own.
None of those reverse quickly. This is a cost curve, not a spike.
Final Take
Open enrollment is the one week a year when any of this is adjustable, and most people spend about ten minutes on it and re-elect last year's plan.
Two things are worth actual attention this fall. First, compare the plans on total expected cost, not on premium. A plan with a lower premium and a $6,000 deductible is a bet that you will not need care, and at 55 that bet gets worse every year. Add the annual premium to the deductible to see what a bad year actually costs under each option.
Second, if a high-deductible plan is the right answer, the health savings account attached to it is the most tax-advantaged account in the code: deductible going in, untaxed growth, untaxed coming out for medical costs. After 65 it functions much like an IRA for anything else.
The 8.2% is decided above your pay grade. Which plan absorbs it is not.
Written by Deniss Slinkins
Millionaire Core
