Healthcare Costs Drive Health Insurance Premiums

Health care costs are rising at an unsustainable rate and adding a significant burden on families and employers across the country. As policymakers turn their focus to this issue, below are some important facts about rising health care costs:

According to government data, health insurance premiums track directly with the underlying cost of medical care. As the cost of providing medical care increases, premiums rise accordingly. Some employers and families have chosen plans with lower premiums and higher cost-sharing (deductibles, co-pays, and coinsurance) to offset the increase in premiums.

In terms of what’s responsible for rising premiums, the cost of providing benefits has nine times the impact that health plan administrative costs do.

In order to make health care coverage more affordable and to reduce out-of-pocket costs, it is important to focus on the key medical cost drivers. Please see this study by PricewaterhouseCoopers which examines what is really fueling rising health care costs: