Premiums for employment-based health insurance this year will average about $6,400 for single coverage and $15,500 for family coverage, according to projections by the Congressional Budget Office (CBO) and the Joint Committee on Taxation.
In a new report, the CBO says average premiums for individually purchased insurance are also high, although not quite as high as employment-based premiums.
“Although premiums for private insurance have grown relatively slowly in recent years, they have usually grown faster than the economy as a whole and thus faster than average income,” the report says.
From 2005 to 2014, premiums for employment-based insurance grew by 48 percent for single coverage and by 55 percent for family coverage. The report projects similar growth rates over the next decade, although CBO notes that from 2014 to 2016 premiums grew more slowly than the historical norm.
The report also discusses the likely impact of the “Cadillac Tax” on high-cost health insurance, a tax Congress recently delayed until 2020. It will likely lead average premiums for affected enrollees to be about 10 percent lower that year — and up to 15 percent lower in 2025 — than they would have been otherwise.
CBO notes that high and rising premiums affect the federal budget because the government subsidizes most of these premiums — at a cost of roughly $300 billion this year. Nearly all premiums for employment-based insurance are excluded from income and payroll taxes, and many individuals receive tax credits for buying non-group coverage.
Private Health Insurance Premiums and Federal Policy (CBO)