Health Issues

This year, family premiums for employer-sponsored health insurance increased by 7%, reaching an average of $25,572 per year, according to KFF’s 2024 benchmark Employer Health Survey. On average, employees contribute $6,296 annually towards family coverage costs.

This marks the second consecutive year of a 7% increase in premiums. Over the past five years, during a period characterized by significant inflation (23%) and wage growth (28%), cumulative premium growth has also been substantial (24%).

While the total premiums for family coverage continue to rise, the average amount workers pay towards their annual premiums has remained relatively stable over the past five years, increasing by less than $300 since 2019, which translates to a total rise of just 5%. This stability may reflect the pressures of a tight labor market.

For workers with an annual deductible for single coverage, the average this year is $1,787, which is comparable to last year’s $1,735 and shows a modest increase of 8% since 2019, when the average stood at $1,655.

Workers at small firms (with fewer than 200 employees) typically face higher deductibles than those at larger firms ($2,575 compared to $1,538). Among all covered employees, around one-third (32%) of those at smaller firms have an average single deductible of at least $3,000.

“Employers are spending an amount equivalent to purchasing an economy car for each worker every year for family coverage,” said KFF President and CEO Drew Altman. “In recent years, the tight labor market has made it difficult for them to pass on costs to workers who are already facing high healthcare expenses.”

Approximately 154 million non-elderly Americans depend on employer-sponsored health coverage, and the 26th annual survey, which included over 2,100 large and small employers, offers a comprehensive view of the trends influencing it. Alongside the full report and summary of findings released today, an article featuring selective findings will be published in Health Affairs, appearing in its November issue.

The survey reveals that many of the nation’s largest employers (with at least 5,000 employees) are implementing measures to protect lower-wage employees from the effects of escalating healthcare costs. Among these large firms, 29% report having a program to lower premiums for lower-wage employees, while 19% provide a reduced-benefit plan with more affordable coverage.

Employer Coverage of GLP-1 Drugs for Weight Loss is Limited and Restricted

In light of the rising interest in expensive GLP-1 medications such as Wegovy for weight loss, this year’s survey examines the prevalence of such coverage in employer plans.

Fewer than one in five large employers with at least 200 employees offering health benefits (18%) report that they cover GLP-1 drugs for weight loss, while half (52%) state they do not provide coverage, and the remaining 31% are uncertain. Among the largest companies with at least 5,000 employees, more than a quarter (28%) cover GLP-1 drugs, and nearly two-thirds (64%) do not.

Among large companies that offer these medications, about half (53%) impose conditions or requirements for coverage. These requirements might include prerequisites like a consultation with a dietician, psychologist, or other professional (24%); requiring participation in a lifestyle or weight-loss program either before (8%) or during (10%) treatment; or other types of conditions (26%).

Providing coverage for these weight-loss medications carries significant cost implications for employers, as a previous KFF analysis estimated that nearly 50 million adults with employer health plans meet the clinical criteria for these treatments, which can incur thousands of dollars annually per individual.

Among large employers covering GLP-1 drugs for weight loss, one-third (33%) indicated that this coverage will have a “significant impact” on their plan’s prescription drug expenditures. Additionally, nearly half (44%) of all large firms believe that covering GLP-1 drugs will be “very important” or “important” for employee satisfaction with their health plan.

Among large companies that do not currently cover GLP-1 drugs for weight loss, only 3% say they are “very likely” to start doing so in the next year, while 23% indicate they are somewhat likely to do so.

“Employers are challenged by the need to integrate these potentially valuable treatments into their already expensive benefit plans,” stated KFF Vice President and study author Gary Claxton.

Other notable findings include:

• IVF and other family-building benefits. About 27% of large employers with at least 200 workers report covering in-vitro fertilization (IVF), with a similar percentage (26%) covering artificial insemination. A larger percentage (37%) cover fertility medications, while fewer (12%) cover egg or sperm freezing. Approximately one-third of employers are uncertain about whether their plans cover these services.
• Rebates from pharmacy benefit managers (PBMs). PBMs manage prescription drug benefits for payers, including employers, and often negotiate rebates with drug manufacturers for favorable formulary positioning. Among the largest firms with at least 5,000 employees, 34% claim they receive “most” of the rebates negotiated by their PBM or health plan, while another 34% receive “some,” and 8% report receiving “very little.” The remainder are unsure about their rebate amounts.
• Abortion. Among large employers with at least 200 workers, 8% report that their plan does not cover legally provided abortions under any circumstances. Additionally, 18% say they only cover such abortions under limited conditions such as rape, incest, or threats to the life or health of the pregnant individual. Most (45%) of other large employers are unsure about the extent of their abortion coverage. These figures have remained stable since 2023.
• Mental health and substance abuse. Approximately 25% of employers offering benefits say their plan’s network for mental health and substance abuse services is “somewhat” or “very” limited, compared to 10% who report the same for their general networks. About half (48%) of large firms with at least 200 employees have enhanced the mental health counseling resources available to their employees through employee assistance programs or third-party vendors like Headspace or Lyra Health.
• Spousal coverage and incentives for not enrolling. Among large firms with at least 200 employees that provide health benefits to spouses, 24% either charge higher premiums or place restrictions on coverage when spouses have health insurance from another source. Additionally, 12% of large firms offering benefits incentivize employees to enroll in a spouse’s plan, and 13% provide additional compensation or benefits to those who opt out of the company’s health plans.

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An updated collection of charts examines the anticipated growth in health spending over the next few years, focusing on trends in prescription drug costs, out-of-pocket expenses, and other related factors.

In 2024, the growth in per capita health spending is projected to slow down to 4.5%. Expectations indicate a further decline in growth rates for 2025 and 2026, anticipated at 4.2% and 4.3%, respectively. From 2027 to 2032, average annual growth in per capita spending is expected to stabilize at around 5.0%. Throughout this timeframe, national health expenditures are likely to exceed GDP growth, primarily due to rising medical prices.

The insights presented in this chart collection utilize the 2022 National Health Expenditure (NHE) projections provided by federal actuaries. For more analyses and information, visit the Peterson-KFF Health System Tracker, a resource hub focused on monitoring and evaluating the U.S. health system’s performance.

National health expenditure reached $4.5 trillion in 2022, accounting for 17% of the gross domestic product (GDP), and is expected to outpace GDP growth through 2032. This growing expenditure is likely to increase costs for families, employers, states, and the federal government. As policymakers explore various strategies to enhance health care affordability, they are paying close attention to the effects of market consolidation in health care and its potential impact on costs and quality of care. Hospital consolidation is a primary focus because nearly one third of all health care spending is directed towards hospital services. While consolidation could enable providers to function more efficiently and assist struggling providers in underserved areas, it frequently results in diminished competition. A wealth of evidence indicates that consolidation can lead to increased prices, with ambiguous effects on quality.

This analysis investigates the competitiveness of hospital care markets by using RAND Hospital Data, a refined version of cost reports from Medicare-certified hospitals, along with American Hospital Association (AHA) survey data. For conciseness, the terms “independent hospitals” and “health systems” will both be referred to as “health systems.” Competition is quantified in three different ways: the proportion of metropolitan statistical areas (MSAs) dominated by a limited number of health systems, the level of market concentration in MSAs using the Herfindahl-Hirschman Index (HHI), and the evolving share of hospitals associated with health systems. This analysis concentrates on general short-term or general medical and surgical hospitals based on 2022 data, excluding federal hospitals (see Methods for more information).

Key Takeaways

• In 2022, one or two health systems monopolized the entire market for inpatient hospital care in nearly half (47%) of metropolitan areas.
• In over 82% of metropolitan areas, one or two health systems commanded more than 75 percent of the market.
• Almost all (97%) metropolitan areas exhibited highly concentrated inpatient hospital care markets when applying HHI thresholds from antitrust guidelines.

One or Two Health Systems Dominated the Entire Market for Inpatient Hospital Care in Nearly Half (47%) of Metropolitan Areas in 2022

A single health system controlled nearly one in five (19%) metropolitan statistical areas (MSAs), while over one in four (27%) markets were governed by two systems in 2022 (see Figure 1). In more than four out of five metropolitan areas (82%), one or two health systems ruled over more than 75 percent of the market. All these markets classified as highly concentrated according to current antitrust guideline definitions (outlined below). One health system held at least half the market share in three out of four MSAs (75%) and at least a quarter of the market in almost every MSA (98%).

The number of health systems within an MSA generally increases in line with the region’s population. For instance, in 79% of MSAs with populations under 200,000, one or two health systems controlled the market for inpatient hospital care in 2022, as seen in locations such as Muncie, IN; Napa, CA; and Amherst Town-Northampton, MA (Figure 2). MSAs with one or two health systems represent nearly half (47%) of all MSAs but only 12% of the U.S. metropolitan population.

On the other hand, almost all (53 out of 54) MSAs with populations of one million or more had at least four health systems, as is the case for Detroit, Miami, and Phoenix. These MSAs with four or more health systems make up 35% of all MSAs and 79% of the U.S. population residing in metropolitan areas.

However, in nine of these relatively large MSAs with four or more systems, the two largest health systems had control over at least 75% of the market. Moreover, in 37 of these markets, they accounted for at least 50%. For instance, in the MSA encompassing Austin, TX, with a population of 2.4 million, two systems (HCA Healthcare and Ascension Health) dominated 85% of the inpatient hospital care market, even though Austin hosts more than four health systems. The metropolitan area covering Portland, OR, with a population of 2.5 million and also more than four health systems, showcases a slightly less concentrated market compared to Austin’s; however, the two largest systems (Legacy Health and Providence) still collectively hold 56% of the market. (Refer to Methods for a discussion regarding MSAs as hospital market geographies).

Nearly all (97%) metropolitan areas had highly concentrated markets for inpatient hospital care in 2022 based on current antitrust guidelines

Another approach to evaluating market competitiveness involves analyzing concentration through the Herfindahl-Hirschman Index (HHI), which gauges the number of competitors in a market and their market shares. The scale ranges from 0 (indicating perfect competition) to 10,000 (indicating a monopoly). According to current merger guidelines from the Federal Trade Commission (FTC) and Department of Justice (DOJ), markets are categorized as: not concentrated (HHI < 1,000), moderately concentrated (1,000 – 1,800), and highly concentrated (HHI > 1,800). This analysis calculates HHIs for MSAs and classifies these regions accordingly, although alternative market boundary definitions can yield different competition levels (see Methods).

In 2022, nearly all (97%) MSAs showed high market concentration for inpatient hospital care, based on HHI thresholds from current merger guidelines (Figure 3). These guidelines reflect 2023 updates that lowered the HHI thresholds for moderately and highly concentrated markets. Under previous guidelines, a large proportion—though marginally smaller (93%)—of MSAs were classified as highly concentrated markets, corroborating an estimation from a previous study (90%) using 2016 data.

Similar to the findings regarding the number of health systems in MSAs, more populated metropolitan areas generally tended to be less concentrated and more competitive than those with smaller populations, though this wasn’t universally true. All 13 MSAs identified as either not concentrated or moderately concentrated had populations exceeding one million, including places like Cincinnati, Oklahoma City, and Miami. Nevertheless, 41 MSAs with populations greater than one million—including Houston, Denver, and Atlanta—exhibited highly concentrated hospital markets. Overall, 70% of individuals residing in metropolitan areas lived in highly concentrated hospital markets.

The proportion of hospitals affiliated with health systems rose from 56% in 2010 to 67% in 2022, with growth observed in both rural and nonrural areas

As of 2022, approximately two-thirds of hospitals (67%) are affiliated with larger systems, a rise from 56% in 2010 (Figure 4). A lower percentage of rural hospitals than nonrural ones were part of a health system in 2022 (52% vs. 83%), though both rural and nonrural areas have seen an upward trend: from 43% in 2010 to 52% in 2022 among rural hospitals, and from 69% in 2010 to 83% in 2022 among nonrural hospitals.

As of 2022, the majority of system-affiliated hospitals (53%) belonged to systems with at least 15 hospitals, while 22% were part of systems with 50 or more hospitals. Systems with at least 100 hospitals accounted for 13% of system-affiliated hospitals.

Hospital consolidations into larger systems do not always result in diminished local market competition, especially if an independent hospital is absorbed by a larger system that lacks existing facilities in that locality. Nonetheless, mergers across hospitals that serve distinct geographic markets for patient care—termed “cross-market” mergers—may still lead to escalated prices in certain instances.

In 2022, nearly half (47%) of metropolitan areas across the nation had only one or two hospitals or health systems offering general inpatient hospital care, according to a recent KFF analysis.

The analysis explores the level of competition among hospitals amidst a surge of hospital consolidations that has garnered the attention of both state and federal regulators. Approximately one in five (19%) metropolitan statistical areas are served by just one hospital or health system, while more than a quarter (27%) are under the control of two hospitals or systems.

In a vast majority of metropolitan areas (82%), one or two hospitals or health systems accounted for at least three-quarters of all inpatient hospital discharges, thus fulfilling the criteria for highly concentrated markets as outlined by current federal antitrust standards.

The quantity of hospitals or health systems in a metropolitan area commonly increases with the population size of the region. A significant majority of smaller metropolitan areas (fewer than 200,000 residents) have only one or two hospitals or health systems providing inpatient care, while almost all of the largest areas (with at least one million residents) host a minimum of four hospitals or health systems.

Additional findings include:

• Almost all (97%) metropolitan areas exhibited highly concentrated markets for inpatient hospital care in 2022, as measured by the Herfindahl-Hirschman Index, which assesses the market shares of participants in a specific market. This metric is utilized by the Federal Trade Commission and Department of Justice in their current guidelines for evaluating hospital or health system mergers.
• Two-thirds (67%) of hospitals across the country were affiliated with health systems in 2022, an increase from 56% in 2010. This rise in affiliated hospitals impacted both rural and urban areas, despite the fact that nearly half (48%) of hospitals in rural regions remain independent of larger health systems.

Immigrant adults represent a diverse segment of the population, constituting 16% of adults in the United States and significantly contributing to the nation’s workforce and communities. As we approach the 2024 election, anti-immigrant sentiment has surged, with immigration becoming a focal issue for various candidates. The Trump campaign has frequently labeled immigrants as contributors to crime, a financial burden on taxpayers, and a liability for government programs such as Medicare and Social Security. Meanwhile, the Harris campaign has centered its immigration narrative around her strong law enforcement background as a former attorney general in a border state, while also emphasizing her family’s immigrant heritage. Certain states have enacted restrictive measures aimed at immigrants, including mandates for hospitals to gather patient immigration status.

In light of this rhetoric and recent state actions, information on immigrants’ health care utilization and costs, as well as their economic contributions, particularly in the health care sector, is essential. This brief presents important data on these subjects, utilizing KFF analysis from various sources, including the KFF/LA Times Survey of Immigrants, the largest nationally representative survey of immigrants conducted to date, along with other studies.

Immigrants are no more likely than U.S.-born citizens to report using government assistance for food, housing, or health care; undocumented immigrants remain ineligible for federally funded assistance.

The 2023 KFF/LA Times Survey of Immigrants reveals that, despite experiencing lower household incomes and encountering financial difficulties, immigrant adults are just as likely as U.S.-born adults to state that they or someone in their household received government assistance for food, housing, or health care in the last year. In fact, approximately one-quarter (28%) of both immigrant adults and U.S.-born citizen adults reported receiving such assistance within the past 12 months (Figure 1).

Lawfully present immigrants face eligibility restrictions for federal programs like Medicaid and the Children’s Health Insurance Program (CHIP). Generally, lawfully present immigrants must possess a “qualified status” to access Medicaid or CHIP. Many, including most lawful permanent residents or green card holders, must wait five years after achieving qualified status before enrolling, provided they meet all other eligibility criteria. Some lawfully present immigrants, such as refugees and asylees, are exempt from this five-year waiting period. Additionally, states can expand coverage to lawfully residing immigrant pregnant individuals and children without this waiting period. Lawfully present immigrants can also purchase coverage through the Affordable Care Act (ACA) Marketplace and qualify for tax credits to help lower their costs immediately. Those meeting the work requirements can enroll in Medicare, while others may purchase Medicare Part A after maintaining legal residence in the U.S. for five consecutive years.

Undocumented immigrants cannot enroll in federally funded programs like Medicaid, CHIP, or Medicare, nor can they buy coverage through the ACA Marketplaces. Medicaid can cover emergency services for individuals eligible for Medicaid but for their immigration status. Emergency conditions encompass those that threaten the individual’s health or result in serious bodily impairment, although states hold discretion regarding what services qualify for Emergency Medicaid reimbursement.

Some states have initiated fully state-funded programs to extend coverage to immigrants regardless of status, although the eligibility criteria and benefits provided vary. Studies indicate that expanding health coverage for immigrants can lead to decreased rates of uninsurance, increased health care utilization, reduced costs, and improved health outcomes.

Immigrants, especially undocumented ones, utilize health care services, including emergency care, less than U.S.-born individuals.

Research indicates that immigrants, both lawfully present and undocumented, engage less with health care services than U.S.-born citizens. The KFF/LA Times Survey of Immigrants shows that undocumented immigrants are less likely to seek or receive care in the U.S. compared to lawfully present immigrants and naturalized citizens. Approximately 63% of likely undocumented immigrant adults report having a health care visit in the past year, compared to 74% of lawfully present immigrant adults and 82% of naturalized citizen adults.

This lower health care utilization among immigrants can be attributed to their overall healthier and younger demographics, along with increased barriers such as language access issues, confusion, and fears related to immigration. Analysis from KFF indicated that policies from the Trump administration intensified these fears and led to increased hesitance in seeking care.

Immigrants incur lower health care costs compared to U.S.-born individuals.

Reflecting their reduced health care utilization, immigrants exhibit lower health care expenditures than their U.S.-born counterparts. KFF’s analysis of 2021 medical expenditure data indicates that the average annual per capita health care expenditures for immigrants are about two-thirds that of U.S.-born citizens ($4,875 vs. $7,277) (Figure 3). This includes lower spending across various health care services such as office visits, prescription medications, inpatient and outpatient care, and dental services. These findings support other research revealing that immigrants’ overall health expenditures range from half to two-thirds compared to those of U.S.-born individuals, irrespective of immigration status, with lower per capita expenses noted across private and public insurance sources, especially among undocumented immigrants. A particular study highlighted that undocumented immigrants tend to be uninsured and have significantly reduced yearly health care expenditures compared to U.S.-born individuals, with no substantial differences in rates of uncompensated care between the two groups.

Immigrants bolster the economy through their workforce participation and tax contributions, with evidence suggesting they help subsidize health care for U.S.-born individuals and bolster Medicare and Social Security.

Immigrants play a crucial role in addressing the nation’s labor shortages by occupying unmet manufacturing and service needs, with research indicating they do not displace U.S.-born workers. Their contributions are particularly evident in essential sectors such as construction and agriculture, which are vulnerable to health risks and injuries, including climate-related hazards. Furthermore, immigrants, alongside their adult children, significantly enhance the health care workforce, serving as physicians, surgeons, nurses, and long-term care workers (Figure 4). With ongoing projections of shortages in health care employment and a growing population aged 65 and older, immigrants could be pivotal in alleviating these workforce deficits.

Studies show that undocumented immigrants contribute billions yearly in federal, state, and local taxes, with more than a third attributed to payroll taxes funding programs they cannot access, such as Social Security and Medicare. Additional research indicates that immigrants contribute more to the health care system than they use through taxes and premiums, effectively subsidizing health care for U.S.-born citizens. Earlier studies found that without the input of undocumented immigrants into the Medicare Trust Fund, it would face insolvency sooner, and demonstrably, undocumented immigrants positively impact the financial health of Social Security.