Rising health costs could mean a shift in making premium payments

The coming year will bring a shift in how health care premiums are paid, as well as the need for consumers to have a portfolio of health care products, including health insurance, direct primary care and telemedicine.

Guy Ezekiel, CEO of Zorro, a tech-driven individual coverage health reimbursement arrangement platform, discussed his observations on health care in the coming year during a recent interview with InsuranceNewsNet.

Health care premiums continue to rise, with multiple independent forecasts pointing to significant premium hikes in 2026, generally landing in the 6%–9% range. Mercer predicts single coverage in a typical PPO plan is expected to cost about $2,400 in 2026, while family plans may reach deductions of about $8,900. Employers are anticipated to spend over $18,000 per worker on average to maintain these benefits. Higher costs are driven by higher costs of care, tariffs and increasing use of GLP-1 drugs.

With the cost of employer-based care edging toward $30,000 annually, Ezekiel said he predicts a shift in the way premiums are paid and he listed a few factors influencing that prediction.

The first factor is the complex nature of the workforce.

“You have part-time employees, seasonal employees, hybrid employees, employees working across different states,” he said.

The employee population becomes even more complex when combined with health care consumerization – increased usage of care – he said. Along with increased usage is the rising cost as inflation puts a higher price tag on care received.

“That all means we'll have to come up with different strategies in order to pay for health care and health insurance,” he said.

Democratizing health care and health insurance

Ezekiel called for “democratizing health care and health insurance.”

In addition, he said, “We haven't done a great job in this country on educating individuals about how to pay for health insurance and how to pay for  care needs.”

The days of consumers having access to a low-deductible plan that took care of most needs for reasonable out-of-pocket costs are over, Ezekiel said.

Looking to the future, Ezekiel predicted consumers will eventually buy a portfolio of products addressing their health care needs, similar to a portfolio of investment products.

“One product might be a health insurance product but on top of that, there will be a direct primary care plan and maybe a telemedicine plan and maybe optimizing a health savings account-type of plan and a flexible spending account-type plan.

“With rising health costs, rising care needs, rising premiums, an employee population that is becoming more hybrid and more complex, and consumerization, this is all driving us to educate our employees and to make sure that we are equipping them with multiple solutions to pay for their health care needs.”

Health care spending ‘unsustainable’

The Centers for Medicare and Medicaid Services projects that the health care share of U.S. gross domestic product will reach 20.3% by 2033, a percentage that Ezekiel said is unsustainable.

He called for better education to help health care consumers understand how to spend their money for coverage.

“We’ve been educated that HMOs are terrible plans and PPOs are better plans. We've been educated that high-deductible plans are terrible and we've been underutilizing HSAs. And that isn't necessarily the case. The best health systems in the world are basically HMO-type plans. The reason for that is, when you are choosing an HMO plan, you have a primary care provider, which is your gatekeeper manager. They’re taking care of all of your health care needs, and they’re helping you understand if you actually need a referral to a specialist.”

Ezekiel said narrow-network plans are not always a bad choice for consumers.

“Sometimes buying low-premium plan with a narrow network is much better than buying a high premium with a broader network,” he said. “Why do I need a network with a dozen dermatologists when I only need one dermatologist?”

He also called for every individual to be required to carry at least minimal health coverage.

“I think all individuals should have a minimal type of plan that they are able to buy,” he said. “I want to make sure that nobody is without any insurance whatsoever, even if it's a stop-loss type insurance, a catastrophic type of a plan.”

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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 [email protected].