Hi readers, welcome to Wednesday.
It's open enrollment, and health care premiums are on the rise. To get to the bottom of why costs keep rising, my colleague Jonquilyn Hill spoke with KFF chief Washington correspondent Julie Rovner for the Explain It to Me podcast. Read on for their conversation (you can also listen to it here). |
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| Jonquilyn Hill Why are premiums going up so quickly now? |
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| Julie Rovner
Well, there's a bunch of reasons, but they come down to two things: price and utilization. Utilization is how many health care services people use. The more services people use, the more the nation's health care bill goes up. There are a lot of things that are driving expanded use right now. One of them is the aging of the baby boomers. As we get older, we use more care, and the baby boomers have been turning 65 since 2010.
Another is that, to some extent, we're still catching up from health care that people didn't get during the pandemic, when nobody was leaving their houses and when you basically didn't go to the doctor unless you absolutely had to. We're still seeing people not only getting care that they didn't get then, but people who didn't get care then and should have, who are sicker than they might have been if they'd gotten care in the pandemic.
Then, of course, there's just new things that we can do. Everybody knows about the GLP-1 weight-loss drugs that are so popular and so highly used right now. We have a lot more new drugs. Some of these are amazing advances.
More people are getting surgery now because of medical advances. You used to have to consider how long you would be laid up if you had a joint replaced or had some kind of surgery. Now, we have much easier surgeries, so it makes it much easier to do these things.
Then there's the price side, and I can sum it up in one sentence: We have the highest prices in the world, because people who provide health care here can set prices that high. The government doesn't regulate it nearly as much as they do in other countries. Most other countries do have hybrid systems. They do use some private insurance and some government subsidies, but they also have much more serious regulation of prices than the United States has. |
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| Jonquilyn Hill
It's really wild, because we should be going to the doctor. We should be taking care of ourselves. But it feels like when it comes to the price of medical services and the price of insurance, we get punished for it. |
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| Julie Rovner
We do. We now spend so much on health care that it's 18 percent of our national gross domestic product (GDP). Lots of people who would like to earn money are going into health care, so we have people encouraging possibly unneeded health care to make a profit. There's that piece of it also, in addition to the things that we should do that end up costing us money.
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| Julie Rovner
There is. One of the reasons that, in 2026, ACA premiums are rising is because expanded subsidies first approved in 2021 had basically doubled enrollment, and now, they are set to expire. Insurers seeing that those extra premiums were scheduled to end said, “Well, a lot of people are going to no longer be able to afford their health insurance, so we're going to have to raise premiums on the theory that the sick people are going to hang onto their health insurance and the healthier people are probably going to drop it if they see the prices go up.”
But everyone will be affected if people can no longer afford their coverage and go uninsured, because they won't get medical care until they absolutely have to, and then, it's more expensive. The cost of that care is going to have to get passed along to somebody. |
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| Jonquilyn Hill Are employers absorbing some of these higher costs for people who get that employer-sponsored insurance? |
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| Julie Rovner
It depends. During times when it's hard to hire people, and we have tight labor markets, employers try to absorb as much of the increases in health care spending as they can, because they don't want to load more onto their workers and, therefore, make it harder to win new workers and retain old workers.
Right now, the labor market is not as strong as it has been, and health care costs are going up. So, it's expected that a lot of employers are going to pass along a lot more costs to their workers. |
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| Jonquilyn Hill What can consumers do to try to mitigate these costs? |
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| Julie Rovner
It's really hard. There are a number of people who think that price transparency is a big help. It's probably not the answer to everything, but knowing what things cost in advance certainly doesn't hurt. Being able to shop around for elective services also doesn't hurt. Sometimes, if you go to a hospital, you can find the same care at an outpatient clinic for much less, because of the complicated ways that government and private insurers pay for these things. So, sometimes, you can save money. Sometimes, you can offer to pay cash instead of using your insurance. That's very true for things like generic drugs.
So, there are ways to save some money, but we're all captives of the mess of a health care system that we have right now. |
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| Jonquilyn Hill If insurance just keeps getting more and more expensive, do you think we'll see more people opt out of it altogether? |
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| Julie Rovner
Well, that's a concern, and that's where we were before the Affordable Care Act passed. We had 14 percent of the population that didn't have insurance. Now, it's down to an all-time low of about 8 percent.
But we're definitely going to see people lose their insurance, even if they're not dropping it voluntarily. The bill that Republicans passed this summer takes away eligibility for a lot of people on Medicaid, and out-of-pocket costs are going up dramatically, even if you do have insurance. Deductibles, and co-payments, and just the cost of medical care in general means that even people with pretty good insurance end up owing lots of money out of pocket. So, I think we're coming to another transition point where this is going to be back on the national agenda.
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⮕ Keep tabs
Saved by SCOTUS: With Trump’s tariffs apparently in trouble, my colleague Eric Levitz explains how the Supreme Court just might rescue Trump from himself — and save everyone some money in the process. Power at the polls: With electric bills on the rise, Vox’s Umair Irfan explains how clean energy could become a huge political winner for Democrats. More slumber parties: It seems to be an unwritten rule that once you reach a certain age, you won't sleep over at a friend's house anymore — but why is that? Vox’s Allie Volpe argues slumber parties could be a cure to adult loneliness. American violence: How stand-your-ground laws are fueling a rise in legally sanctioned killings. [Wall Street Journal] |
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The Trump administration is making GLP-1s more affordable. This class of drugs seems to have forever changed the game on diet and exercise for Americans. |
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Have you read my colleague Allie Volpe’s guide to complaining yet? Believe it or not, there’s a way to do it strategically — and including an action-oriented step helps, too. You can read her full story here. |
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Today’s edition was produced and edited by me, staff editor Cameron Peters. Thanks for reading! |
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