Health insurance premiums continue to grow rapidly

According to KFF Health News, average monthly premiums for families with employer-provided health coverage have grown rapidly over the last 15 years. In California, the average monthly premium increased from just over $1,000 in 2008 to almost $2,000 in 2023. Premiums also continued to grow significantly in 2024.

"Insurance premiums have been going up faster than wages over the last 20 years," said Miranda Dietz, a researcher at the University of California-Berkeley Labor Center. "Especially in the last couple of years, those premium increases have been pretty dramatic."

Between 2021 and 2023, states with the highest average monthly employee share of a family premium were Arizona, North Carolina, Virginia, and Maryland. In these states, employees were responsible for over $600 of their monthly family premiums. In 13 states, the average monthly employee share was over $550. 

Some states have established spending growth caps to help slow the increase in healthcare premiums. In California, the Office of Health Care Affordability set a five-year target of 3.5% for annual spending growth, which will drop to 3% by 2029. Healthcare organizations that fail to meet these targets could face significant fines, though they will likely not occur until 2030 or later.

Do these spending caps "mean that health care becomes more affordable for people?" Dietz asked. "No. It means it doesn't get worse as quickly."

Americans borrowed $74 billion for healthcare last year

Amid rising health costs, including for insurance, many Americans are struggling to afford care. According to a new survey from West Health and Gallup, over 31 million Americans borrowed around $74 billion to pay for healthcare last year, even though most had some form of health insurance.

Among those who said they borrowed money to pay for healthcare, over half (58%) said they borrowed $500 or more, and 41% said they borrowed $1,000 or more. Fourteen percent of respondents said they borrowed $5,000 or more. 

"Too many Americans are racking up medical debt whether they have health insurance or not," said Tim Lash, president of the West Health Policy Center. "A high-priced healthcare system that requires Americans to take out loans or make painful tradeoffs just to stay healthy is in desperate need of policy reform or things will get even worse."

In the survey, 58% said they were at least somewhat concerned about a major health event landing them in debt, with 28% saying they were "very concerned." Concerns about potential debt from healthcare costs were highest among Hispanic adults (63%), Black adults (62%), and women (62%).

Across income levels, over 60% of households with annual incomes under $120,000 said they were worried about healthcare debt. Forty percent of households with annual incomes of over $180,000 also reported concerns about healthcare debt.

"It is clear that high healthcare costs continue to burden the American people, and financial insecurity around care is not limited to any one demographic," said Dan Witters, director of wellbeing research at Gallup.