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Employer-Provided Health Insurance Premiums

In 2018, private businesses contributed $560.7 billion in employer-sponsored private health insurance premiums. By 2028, this figure is projected to reach $893.51 billion (calculations below). Additional details and accompanying calculations have been presented below.

Employer-Provided Health Insurance Premiums

  • According to historical data published by the CMS, the total health expenditure contribution from private businesses was $726.8 billion in 2018. Out of this figure, private businesses contributed $560.7 billion in employer-sponsored private health insurance premiums.
  • In 2013, the total health expenditure contribution from private businesses was $564.9 billion with $434.3 billion coming in the form of employer-sponsored private health insurance premiums.
  • The CAGR of the total employer-sponsored private health insurance premiums between 2013 and 2018 was 5.24% (calculations below).
  • According to projected figures from the CMC, the health care expenditure contribution from private businesses is expected to grow from $726.8 billion in 2018 to $760.3 billion in 2019, $919.5 billion in 2023, and $1,158 billion by 2028. How these figures breakdown by employer-sponsored private health insurance premiums and other private business contributions to health care expenditure was not published. The CAGR of the health care expenditure contribution from private businesses between 2018 and 2028 is 4.77% (calculations below).
  • The research team has estimated that private businesses will contribute $587.45 billion, $707.81 billion, and $893.51 billion in employer-sponsored private health insurance premiums in 2019, 2023, and 2028, respectively. (Calculations below for all three figures)

Research Strategy

The research team has confirmed that the CMS Office of the Actuary publishes data on the contribution of private businesses to the national healthcare expenditure, including their contribution to employer-sponsored private health insurance premiums.

Historical Growth

According to historical data published by the CMS, the total health expenditure contribution from private businesses was $726.8 billion in 2018. Out of this figure, private businesses contributed $560.7 billion in employer-sponsored private health insurance premiums. In 2013, the total health expenditure contribution from private businesses was $564.9 billion with $434.3 billion coming in the form of employer-sponsored private health insurance premiums. Leveraging an online cumulative annual growth rate (CAGR) calculator, we calculated the growth rate of employer-sponsored private health insurance premiums between 2013 and 2018 using the variables below:

Employer-sponsored private health insurance premiums grew by a CAGR of 5.24% between 2013 and 2018.

Projected Growth

According to projected figures from the CMC, the health care expenditure contribution from private businesses is expected to grow from $726.8 billion in 2018 to $760.3 billion in 2019, $919.5 billion in 2023, and $1,158 billion by 2028. How these figures breakdown by employer-sponsored private health insurance premiums and other private business contributions to health care expenditure was not published. In 2013 and 2018, the share of employer-sponsored private health insurance premiums as part of private business healthcare expenditure contribution was 76.88% ((434.3/564.9)*100) and 77.15% ((560.7/726.8)*100). Therefore, based on the aforementioned, we can assume that the share of employer-sponsored private health insurance premiums as part of private business healthcare expenditure contribution remains the same within the projected period. On that basis, we can calculate the total employer-sponsored private health insurance premiums for 2019, 2023, and 2028 as shown below.

Private Businesses Healthcare Expenditure Contribution CAGR (2018-2028)

The CAGR between 2018 and 2028 is 4.77%.
Applying this CAGR to employer-sponsored private health insurance premiums, the total employer-sponsored private health insurance premiums for 2019 is $587.45 billion using the 2018 employer-sponsored private health insurance premiums as the initial value and a period of one year in the online CAGR calculator.
The total employer-sponsored private health insurance premiums for 2023 is calculated as $707.81 billion using the 2018 employer-sponsored private health insurance premiums as the initial value and a period of five years in the online CAGR calculator.
Lastly, the total employer-sponsored private health insurance premiums for 2028 is calculated $893.51 billion using the 2018 employer-sponsored private health insurance premiums as the initial value and a period of 10 years in the online CAGR calculator.

TDM

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