In California, the monthly health insurance premium for a family has surged by approximately $1,000 over the past 15 years, a figure that doubles the rate of inflation. The rising costs of hospital care and prescription drugs are believed to be fueling this dramatic increase in premiums.

According to an analysis of federal government data by KFF Health News on the 10th, the average monthly premium for families enrolled in employer-provided health insurance in California’s private sector has nearly doubled over the past 15 years. From $1,000 in 2008, it jumped exactly twofold to $2,000 in 2023—a rate more than twice the inflation increase over the same period.

The steep rise in premiums has left small business owners and workers alike disheartened. According to the Department of Health and Human Services, the average annual cost of family health insurance provided by private-sector employers in California in 2023 was about $24,000, or $2,000 per month. While employees receive health insurance benefits from their employers, they still bear a portion of the cost, and this employee contribution has been rising sharply each year.

Kirk Battan pays over $2,000 a month for a high-cost “Blue Shield” health insurance plan through Covered California, the state’s official health insurance marketplace. He could have opted for a cheaper plan from another provider, but he couldn’t bring himself to cancel a plan that included his wife’s primary care physician. “The insurance is purely for the two of us, and we’re not even sick right now,” Battan fumed. “(This premium) is an outrageous price.”

The surge in premiums isn’t limited to California. The average premium for families with employer-provided health insurance has risen rapidly nationwide from 2008 to 2023. Small business owners worry that without an expansion of federal subsidies to make health insurance more affordable, the problem could worsen. According to the Employee Benefit Research Institute, over the past 30 years, the percentage of businesses with 10 to 24 employees offering health insurance nationwide has dropped from 65% to 52%. For businesses with fewer than 10 employees, coverage rates have plummeted from 34% to 23%.

Covered California, a public marketplace providing health coverage to over 1.9 million Californians, has seen its premiums rise by about 25% since 2022 alone—double the rate of inflation. Similarly, CalPERS, which provides insurance services to over 1.5 million active and retired public employees and their families, has experienced a 31% premium increase since 2022. Under CalPERS, public employers cover a portion of insurance costs as negotiated with unions, with employees paying the remainder.

What’s driving this premium surge? Miranda Dietz, a health insurance researcher at UC Berkeley’s Labor Center, explained, “Rising hospital prices are the primary driver of premium increases. Over the past 20 years, premiums have outpaced wage growth, and the increases over the last two years have been particularly dramatic.”

According to Department of Labor data, consumer costs for hospitals and nursing homes have risen by about 88% from 2009 to 2024—roughly double the overall inflation rate. Mark Seelig, a spokesperson for Blue Shield of California, emphasized, “The rising costs of hospital stays, medical care, and prescription drugs are putting upward pressure on premiums.”

<Hongyong Park>