American healthcare: High $26,000 premiums and diminishing returns

Image shows a man looking at a very high medical bill — Health coverage for American families costs an average of $26,000 yearly.

By Susan Rupe

The majority of Americans receive their health care from employer-sponsored plans.

“Employer-sponsored coverage isn’t one small part of the health care system – it is the American health care system,” said Dan Aronowitz, assistant secretary of labor and head of the Employee Benefits Security Administration. He provided a report on employer health policy priorities during the AHIP Medicare, Medicaid, Duals and Commercial Markets Forum in Washington.

With premiums for families covered under employer plans exceeding $26,000 annually, Aronowitz said, “We are spending more on health care and getting less in return.”

Aronowitz promoted President Donald Trump’s health care agenda, which he said would give control back to employers and their workers, and would drive costs down.

In January, Trump formally rolled out what the White House branded “The Great Healthcare Plan.” The administration described it as being built on four pillars instead of a fully detailed bill. Aronowitz listed the four pillars as:

Lowering prescription drug prices. Codifying “most‑favored‑nation” pricing so Americans pay no more than the lowest prices charged in comparable countries. Voluntary drug‑price agreements with manufacturers. Expanding over‑the‑counter availability for certain medications. Launch of TrumpRx, a federal price‑comparison and discount platform
Lowering health insurance premiums. Ending certain insurer subsidy payments and redirecting money directly to consumers to purchase coverage of their choice. Funding cost‑sharing reduction programs to reduce premiums. Targeting pharmacy benefit manager practices the administration says inflate costs.
Holding big insurance companies accountable. Requiring insurers to disclose claim denial rates, wait times, overhead vs. claims spending and coverage details. Establishing “plain‑English” standards so consumers can more easily understand policies.
Maximizing price transparency across the health system. Requiring hospitals, providers, and insurers that accept Medicare or Medicaid to publicly post prices and fees. Expanding transparency rules aimed at reducing surprise medical bills.

In January, the Department of Labor proposed a rule titled “Improving Transparency into Pharmacy Benefit Manager Fee Disclosure” under the Employee Retirement Income Security Act. The rule would require pharmacy benefit managers and certain affiliated brokers and consultants to disclose detailed information about all compensation they receive in connection with self‑insured employer group health plans.

Aronowitz said the proposed rule “creates a complete transparency framework for prescription drug prices.”

EBSA also is working to eliminate barriers to obtaining mental health benefits. The Mental Health Parity Act “promises that mental health benefits will not be relegated to second-tier status,” Aronowitz said.

“We can’t create a world where providing mental health benefits is so costly that employers won’t offer it,” he said.

Mental health parity “isn’t about punishing insurers,” Aronowitz said. “We want to support compliance, not overwhelm it.”

He said EBSA’s ultimate goal “is a system where insurers, employers and providers are partners.”

Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.