CPI says health insurance got 35% cheaper in four years. Family coverage now costs $28,303 a year
The government's index tracks what insurers keep after paying claims, not what you pay. Workers' share of family premiums rose 9% this year.
According to the government's inflation report, health insurance has gotten about 35% cheaper in four years. According to the people who pay for it, it has not. The health insurance line in the consumer price index fell to 133.6 in October 2026, down from 204.5 in October 2022, a drop of 34.7%, per Bureau of Labor Statistics data. Over a similar stretch, the average premium for employer family coverage rose to $28,303 a year, up 28% since 2021, according to KFF's 2026 Employer Health Benefits Survey.
Both numbers are accurate. They measure different things. The BLS does not track the premium on your pay stub. It tracks how much insurers keep after paying claims, and that has been shrinking. The result is an inflation report that shows one of the biggest bills most families face falling in price, while the bill itself keeps climbing.
The number that set off X#
Tuesday's October CPI report revived the fight. Charlie Bilello, chief market strategist at Creative Planning, posted a chart of the index within hours of the release.
"The most absurd number in CPI? According to the US Government, the cost of health insurance has declined 35% over the last 4 years," Bilello wrote. The post drew more than 1,400 likes. It matters because Bilello's charts are widely shared by investors, and his framing turned a technical quirk into a question of whether the inflation numbers can be trusted.
Many replies supplied the answer. "CPI measures health insurance through insurer profit margins, not what you pay in premiums," one user wrote. That is broadly right, as the BLS's own explanation shows below.
The latest monthly print added to the gap. The index fell 1.8% from September to October, from 136.2 to 133.6, not seasonally adjusted. October is one of the two months each year when the BLS updates the insurer data behind the index.
What families actually pay#
KFF's survey of more than 1,900 employers, published October 22, shows the costs moving the other way.
| Employer family coverage, 2026 | Amount | Change from 2025 |
|---|---|---|
| Total premium | $28,303 | +5% |
| Worker's share | $7,471 | +9% |
| Employer's share | $20,832 | - |
| Average single deductible | $1,955 | +$69 |
Source: KFF. The employer's share is the total minus the worker's share.
Workers' share rose much faster than pay. KFF said wages rose 3.7% and general inflation 2.7% over the same year. Workers at firms with fewer than 200 employees pay even more, an average of $9,687 toward family coverage. Almost 157 million Americans under 65 get coverage through an employer.
Larry Levitt, KFF's executive vice president for health policy, summed up the findings when the survey came out: "Worker premiums for family health insurance are up 9%. The total average premium is $28,303. The average deductible is $1,955. It's no wonder people are worried about health care costs." His post matters because it comes from the group that runs the survey.
Why the two numbers point in opposite directions#
The BLS says plainly on its medical care factsheet that it "does not directly price health insurance policies." It says it has not been able to control for changes in plan quality, such as what a policy covers. So it uses an indirect approach called the retained earnings method.
- Start with premiumstotal premiums insurers collect, from industry filings
- Subtract claimsbenefits insurers paid out for care
- Keep the restretained earnings, which cover overhead and profit
- Compare to claimsthe ratio of retained earnings to benefits
- Smooth ita two-year average, updated each April and October
- Lag itthe data trail real time by about 10 months
Source: Bureau of Labor Statistics
Here is the key idea. The money that insurers spend on doctors, hospitals and drugs is not counted in the health insurance line. The BLS moves that weight into the other medical indexes, such as hospital services. The health insurance line only tracks the slice insurers keep. When claims rise faster than premiums, insurer margins shrink and the index falls, even while premiums rise.
That also means the index is small. Health insurance makes up just 0.89% of the overall CPI, per the BLS factsheet. That weight reflects only what households pay out of pocket for premiums. The employer's share, which is most of the $28,303, is not counted at all.
The four-year gap, in one chart#
The index has swung far more than premiums ever do. It hit 204.5 in October 2022, then fell 34% in one year, to 135.0 in October 2023. It has drifted between about 133 and 150 since.
Source: Bureau of Labor Statistics, series CUUR0000SEME
Show the numbers
| Year | Index |
|---|---|
| 2019 | 164.4 |
| 2020 | 181.1 |
| 2021 | 169.5 |
| 2022 | 204.5 |
| 2023 | 135 |
| 2024 | 144.2 |
| 2025 | – |
| 2026 | 133.6 |
Over five years the gap is stark. From October 2021 to October 2026, the CPI health insurance index fell 21%, while the overall CPI rose 22% and the medical care index rose 13%, per BLS data. KFF says family premiums rose 28% from 2021 to 2026, a bit faster than wages (27%) and general inflation (24%) by its measures.
Show the numbers
| Measure | Change |
|---|---|
| KFF family premium | 28% |
| All-items CPI | 22% |
| CPI medical care | 13% |
| CPI health insurance | −21% |
Does it make inflation look better than it is?#
Somewhat, but less than the chart suggests. Because the line carries less than 1% of the index, a 35% fall shaves only a small amount off the headline rate. The medical services that insurers pay for, such as hospital stays and doctor visits, are still measured in other parts of the CPI.
The bigger cost is trust. October's CPI already came in hot, with prices up 0.4% in a month, as we covered in our report on the latest inflation and jobs data. When one of the most painful bills in a family budget shows up as a price cut, people stop believing the rest of the report. That is the reaction across X this week.
The argument is not new. When the index plunged in late 2023, a thread on r/Economics asked why the drop was being ignored, and a post on r/inflation questioned a 30.3% yearly fall in the November 2023 data. Three years later, the same index is making the same point to a new crowd.
What to watch#
The next scheduled update to the insurer data comes with April 2027 CPI, per the BLS method. Until then, the line will mostly reflect price changes in other medical care. For families, the better guide is still the renewal notice: KFF found that most large employers raised workers' costs this year to cover higher projected health spending, including by raising the share of premiums workers pay.
Rising costs are landing on households that already carry record credit card debt, as we reported in our story on the New York Fed's household debt data.
Cite this article
Patrick Karsh. “CPI says health insurance got 35% cheaper in four years. Family coverage now costs $28,303 a year.” 567 Business. Published 2026-11-11. https://567business.com/news/cpi-health-insurance-down-35-percent-premiums-28303
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