California employer health premiums will cost as much as a new car in 2027

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Set us as preferred Employers are bracing for what could be the highest rise in health insurance premiums in 16 years in 2027, driving up the average cost of family coverage in California to more than $30,000 — the price of a new compact car.Health insurance companies expect the cost of medical services and prescription drugs to soar by 9% in 2027, according to a new survey by PwC, the highest rise the researchers have found since 2011.Insurers use those expected medical costs to calculate the price of premiums in the coming year.

Many employers require workers to pay part of that cost.Experts say the escalating costs of employers’ premiums are reducing workers’ wages and take-home pay, while raising the prices of goods and services in California and across the country.“It’s going to erode the standard of living for lots of California families,” said Glenn Melnick, a USC professor of healthcare finance.Melnick said when employers are forced to spend more on health insurance, there is less money available for wages.

The skyrocketing premiums, he said, are like a hidden pay cut for working families.The higher cost also has small-business owners wondering whether they can continue paying for their workers’ health insurance.This year, premiums for staff at the Booksmith, an independent bookstore on Haight Street in San Francisco, leaped by 17%, said Christin Evans, the store’s owner.Next year could bring even more pain.

The monthly premium for four employees is $3,250.To try to cope, Evans said, she has reduced staff hours by closing the store earlier.“We have to absorb it,” she said.“We’re not paying the wages we want to pay or delivering the customer service we’d like to deliver.” Business Kaiser Permanente, the nation’s largest non-profit health group, has veered from its charitable mission and ...