Growth in health insurance premiums continue to outpace inflation

Despite many efforts to curb growth in healthcare costs, KFF Health News reports that health insurance premiums continue to rise faster than inflation. Focusing on California, the article reports that "Average monthly premiums for families with employer-provided health coverage in California's private sector nearly doubled over the last 15 years, from just over $1,000 in 2008 to almost $2,000 in 2023 ... That's more than twice the rate of inflation. ... Average premiums for families with employer-provided health coverage grew as fast nationwide as they did in California from 2008 through 2023." A practical effect of this is that "During the last two decades, the cost of health insurance premiums and deductibles in California rose from about 4% of median household income to about 12%."

The article does mention that "California is trying to lower health care costs by setting statewide spending growth caps, which state officials hope will curb premium increases. ... Other states that imposed similar caps saw health care costs rise more slowly than states that did not." The central enforcement mechanism appears to be fining healthcare organizations whose growth in spending exceeds a 3.5% target. While these efforts may seem promising, previous efforts to slow the growth in costs have also appeared promising at different points in time. Mandating limits to growth will likely cause organizations to look for exemptions of some sort or potentially trim quality of care.