# 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. By Patrick Karsh ยท 567 Business Published: 2026-11-11T12:16:06.052568Z Updated: 2026-11-11T12:16:27.82588Z Canonical: https://567business.com/news/cpi-health-insurance-down-35-percent-premiums-28303 Cite citation_url. Preserve source links, dates and qualifications. date_modified is an edit date, not proof that every claim was rechecked. Third-party images and quoted material retain their own rights. Resolve relative links against https://567business.com/news/cpi-health-insurance-down-35-percent-premiums-28303. 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](https://data.bls.gov/timeseries/CUUR0000SEME). 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](https://www.kff.org/private-insurance/workers-now-pay-7471-on-average-annually-for-family-health-coverage-up-9-or-621-from-2025-benchmark-employer-health-benefits-survey-finds/). 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. https://x.com/charliebilello/status/2120174402847322505 "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](https://www.kff.org/private-insurance/workers-now-pay-7471-on-average-annually-for-family-health-coverage-up-9-or-621-from-2025-benchmark-employer-health-benefits-survey-finds/). 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. https://x.com/larry_levitt/status/2113258880277074294 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](https://www.bls.gov/cpi/factsheets/medical-care.htm) 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. ```diagram type: flow title: How the CPI measures health insurance source: [Bureau of Labor Statistics](https://www.bls.gov/cpi/factsheets/medical-care.htm) --- Start with premiums: total premiums insurers collect, from industry filings Subtract claims: benefits insurers paid out for care Keep the rest: retained earnings, which cover overhead and profit Compare to claims: the ratio of retained earnings to benefits Smooth it: a two-year average, updated each April and October Lag it: the data trail real time by about 10 months ``` 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. ```chart type: line title: CPI health insurance index, each October note: Index level, not seasonally adjusted. October 2025 was not collected because of the government shutdown. source: [Bureau of Labor Statistics, series CUUR0000SEME](https://data.bls.gov/timeseries/CUUR0000SEME) --- Year | Index 2019 | 164.4 2020 | 181.1 2021 | 169.5 2022 | 204.5 2023 | 135.0 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. ```chart type: bar title: Change from 2021 to 2026, by measure suffix: % note: BLS figures compare October 2021 with October 2026, not seasonally adjusted. KFF compares its 2021 and 2026 surveys. source: [BLS](https://data.bls.gov/timeseries/CUUR0000SEME), [KFF](https://www.kff.org/private-insurance/workers-now-pay-7471-on-average-annually-for-family-health-coverage-up-9-or-621-from-2025-benchmark-employer-health-benefits-survey-finds/) --- 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](/news/jobless-claims-lowest-since-1969). 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](https://www.reddit.com/r/Economics/comments/17xg1mt/october_cpi_why_are_we_ignoring_the_health/) asked why the drop was being ignored, and a [post on r/inflation](https://www.reddit.com/r/inflation/comments/18h1xhz/us_health_insurance_costs_went_down_by_a_whopping/) 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](/news/household-debt-record-19-trillion-credit-cards-q3-2026).