Health insurance premiums in the United States increased significantly between 1999 and 2024. It exceeds the worker’s income ratio by three times.According to a new study published in the journal JAMA Network Open.
If the cost of covered health care services increases, your premiums may increase. Using consumer price indexes for key components of health care, including services provided in clinics and hospitals, and administrative costs, based on federal data and data from the Kaiser Family Foundation, we found: The cost of hospital services increased the most.Meanwhile, the costs of physician services and prescription drugs have risen more slowly.
Some of the increases may be due to increased insurance premiums. Hospital outpatient visit and Coverage of GLP-1 drugs. However, studies, including ours, show that the reasons for the sharp rise in insurance premiums are primarily: Healthcare System Integration – Mergers between hospitals and other medical institutions have resulted in hospitals raising prices well above costs.
Hospital CEOs put profits first
Hospitals are aggressively raising prices. Hospital CEOs have incentives to do so..
One study found that nonprofit health systems had the largest salary increases between 2012 and 2019. Went to hospital CEOs The person who has increased the organization’s profits and size the most. However, the financial rewards for providing above-average quality of care have declined. increase charity care – Free or discounted health care non-profit hospitals must provide to some patients who cannot afford the cost – Not significantly linked to CEO compensation.
Board members set performance standards that determine the CEO’s base salary and bonus payments. More than half of the boards of directors of top U.S. hospitals Professional background in finance or business. As a result, researchers and advocates have raised concerns that financial success is a top priority for these institutions.
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One way to help nonprofit hospitals make the health of their communities a top priority is to ask their boards of directors to: Executive Compensation Guidelines Disclosed Salaries and bonuses are similar to the information that for-profit health care companies disclose to shareholders. The public can pressure companies to give greater weight to affordability and quality of care when setting performance goals for nonprofit hospital executives.
Some economists suggest: Hospital fees are regulated. This approach includes setting a price cap for health care services in the most expensive hospitals and limiting price increases in all hospitals. Additionally, regulators will focus on flexible but service-specific oversight to respond quickly to unintended market disruptions.
What Employers Can Do
The cost of employer-provided health insurance is expected to be: 9.5% surge in 2026.
the employer Bears most of the increase in insurance premiums When purchasing insurance for your workers, you may want to be more price sensitive when designing benefits for your employees to help keep insurance affordable for them.
One study found that a health insurance plan that introduced three copayment levels, corresponding to three hospital tiers: low, medium, and high, achieved success. 8% savings per hospitalization There is no evidence of quality deterioration even after three years.
About one-third of large employers Offering non-traditional health plans For example, variable deductible plans have no or low deductibles and set higher deductibles for services from providers who charge higher fees.
hold the hospital accountable
The mission statements of the nation’s largest nonprofit health systems often express the desire to: Improving the health of our communities they serve, especially the most vulnerable.
If we curb price increases in non-profit hospitals, introduce greater price competition It will likely impact the healthcare market, forcing for-profit providers to also lower their prices.
