Employers’ Share of Healthcare Costs Projected to Rise 7.2% 

A report released this week by the global consulting and actuarial firm Milliman projects that employers will subsidize 59% of their employees’ healthcare costs in 2023 for individual and family coverage in employer-sponsored preferred-provider plans (PPO). 

“Healthcare costs increased 5.6% this year and have increased by 4.8% annually since 2021, which is the sort of year-to-year increase we were seeing before the pandemic,” said Dave Liner, co-author of the Milliman Medical Index. “Call it a return to the status quo or a rebound from the pandemic—either way, family healthcare costs have resumed their persistent climb. 

The report said employee costs were 4.9% higher for individual coverage in 2022 compared to 2021 while employer costs increased 5.5% during the same period. In 2023, Milliman expects that gap to widen with employees contributing 4.4% more and employers 7.2% more. 

In 2023, healthcare costs for the report’s hypothetical family of four will be $31,065. Costs for the average person will reach $7,221. The hypothetical family in the report was a male age 47, a female age 37, and two children ages 4 and 1. 

Of the $7,221 coverage cost per individual, the employer contribution is $4,241 (59%); the employee payroll deduction contribution is $1,847 (26%); and the employee’s out-of-pocket costs through co-pays and deductibles is $1,133 (16%), the report said. 

Doug Norris, a co-author of the Milliman Medical Index (MMI), said healthcare cost inflation tends to trail general inflation by about six to 12 months.  

The full report is available here.