How Bad is NC’s Health Cost Crisis?

NC workers pay the second-highest price in the country for insurance through their employer. And prices have grown at double the national rate since 2015.

North Carolina workers benefit from one of the lowest individual income tax rates in the nation, with rates scheduled to dip even lower in the coming years. That’s great work by the Reform Majority and great news for family budgets.

But health costs threaten to neutralize the benefit of those low tax rates. “Workers now lose 20% of a paycheck to health care costs,” indicates a recent report from the NC State Treasurer, and the problem is getting worse.

Nearly 4.8 million workers in North Carolina receive health insurance through employer-based plans.

In 2022, the most recent year for which data is available, North Carolina workers paid the second-highest price in the country for employer-sponsored family health insurance plans. Only Floridians pay more, and they don’t have a state income tax.

For employer-sponsored single plans, North Carolina workers faced the eighth-highest cost.

The trend lines suggest the problem is getting worse, not better.

Between 2015 and 2022, the cost to a North Carolina worker for an employer-sponsored family health insurance plan rose by 70%, the second-highest increase in the nation and DOUBLE the national average.

For single health plans, the 49% cost increase was seventh-highest in the nation.

Insurers are not somehow picking on North Carolinians. They set premiums based on the cost of care, and the cost of care is driven in part by regulation and law.

We often tout North Carolina’s high marks in economic rankings, and those are well-deserved. But the health care industry accounts for roughly one of every six dollars cycled through the economy. If North Carolina health costs maintain this trajectory, our boom decade may be in jeopardy.

Source: Federal data compiled by KFF.