The rising cost of healthcare insurance premiums in the United States is causing concern among Americans. While people have been closely monitoring prices of everyday items like eggs and gasoline due to inflation, the escalating premiums for medical insurance should be a major cause for alarm. Over the years, these premiums have been steadily increasing, and now they are rising at an unprecedented rate.
Between 2000 and 2020, the price of eggs fluctuated between just under $1 and approximately $3 per dozen, reaching $6.23 in March before dropping to $3.78 in June. Similarly, the average price of gasoline, after fluctuating between $2 and $4 per gallon for over a decade starting from 2005, peaked at $4.93 in 2022 and has recently decreased to just over $3.
However, the premiums for employer-sponsored health insurance for individuals have more than quadrupled since 1999. Just between 2023 and 2024, they increased by over 6% for both individual and family coverage, a sharper rise than wages and overall inflation. For those with health plans under the Affordable Care Act (ACA), the rate hikes may have been even more drastic, especially for those working for small businesses or purchasing their own coverage.
Looking ahead to 2026, insurers in the ACA markets have proposed exorbitant price increases. In New York, UnitedHealthcare has suggested a 66.4% hike, while HMO Colorado has requested an average increase of over 33% in that state. In Washington, the average proposed increase by all insurers is 21.2%, and in Rhode Island, it is 23.7%.
According to the Business Group on Health, healthcare costs have cumulatively increased by 50% since 2017. A survey conducted in 2021 revealed that 87% of companies believe that providing healthcare insurance to their employees will become unsustainable in the next five to 10 years.
Furthermore, insurers in the ACA marketplace are planning to raise premiums by an average of 20% for the upcoming year. This significant increase in premiums, if compared to suddenly higher rent or mortgage payments for millions of Americans, highlights the financial burden.
While insurance regulators could potentially demand reductions in proposed rates, this does not always occur, with some states being more proactive than others. There is a fear that excessive regulatory intervention could drive insurers away from certain markets.
Several factors are contributing to the rising premiums, including new tariffs on medical supplies and medications, as well as healthcare spending reductions and the expiration of certain premium subsidies. It is projected that around 16 million Americans will be uninsured by 2034, largely due to affordability issues.
As insurers continue to prioritize shareholder interests over patient care, negotiating better terms for healthcare plans may be more feasible for large companies than smaller ones. Additionally, not only are premiums increasing, but deductibles are also on the rise, with the average deductible for an ACA silver plan nearly doubling since 2014.
In an effort to combat rising costs, some states are exploring the option of a state-run public insurance plan. However, the success of such initiatives has been limited due to lower provider participation rates and reduced access to healthcare.
If voters paid as much attention to healthcare insurance costs as they do to the prices of eggs and gasoline, policymakers may be prompted to take more decisive actions to address the issue.
