Column: I'm a Nebraska health insurance executive. The US is facing a health care crisis

Would you pay $107 for a gallon of milk?

Of course not. Yet if the cost of milk had been allowed to increase at the same rate as health care in the United States, that's exactly what the price tag would be.

That's how significant the cost increases in health care in the U.S. have been — with no end in sight unless we all work together now to make meaningful change.

This isn't just a sudden problem. The health care crisis we are facing has been building for years.

Thirty years ago, I was an intern for Iowa Sen. Chuck Grassley. At that time, health care was about 12 or 13% of GDP, which means Americans spent 12 or 13% of everything produced in the U.S. on health care. In the years since then, there have been many attempts to "fix" the health care system and rein in costs. Yet today, health care represents 18 to 19% of GDP.

That doesn't mean that people haven't been working hard to find a solution, or that a solution just can't be found. It's an indication of the magnitude of the problem we're collectively facing. Ensuring access to quality, affordable health care has never been easy, but the pressures caused by today's economic climate, workforce challenges and an uncertain regulatory and political environment are pushing the system to the breaking point.

Federal legislation is likely to pose new challenges and exacerbate old ones. There is a growing chasm between the government's reimbursement for care and the actual cost for providing that care. That widening gap has historically been filled by health insurance companies like ours, with employers and individuals picking up the tab.

Providers deserve to be paid fairly for the services they provide to their patients, but at the same time, sharply rising medical costs are driving unsustainable premiums for employers, families and individuals. That structure is now straining under the price increases for drugs and medical care.

According to the Consumer Price Index, medical costs have historically grown considerably faster than prices in general. Since 2000, medical prices have grown 40% faster than general inflation. In 2023, we paid out on average $48.1 million in benefits to our members each week. This year on average we have been paying out around $60.2 million in claims each week. We are continuing to see sharp increases in claim costs — with no indication they are slowing down.

Our members are feeling the pressure. Employers are feeling it. Health care providers are feeling it. We're feeling it, too.

The premiums we set are a direct reflection of the cost of health care — and as claim costs go up, so do premiums. All over the country, employers and individuals are bracing for higher than normal premium increases this fall. The Wall Street Journal recently reported that premiums across the United States are rising at a faster pace than any year since 2011. Additionally, if the federal government's enhanced premium tax credits expire at the end of the year as scheduled, many individuals and families covered under ACA plans will be faced with significant premium increases.

As a mutual insurance company, we don't report to Wall Street or pay dividends to shareholders — our focus is on our member-owners and improving their access to quality health care. For every premium dollar we receive from our members, we spend 91 cents on paying for their health care. The remaining 9 cents pays for administrative expenses and taxes.

We have reached a critical crossroads in U.S. health care, and without urgent action from all stakeholders, including providers, insurers, policymakers and consumers, our system will not be able to withstand the weight of the pressures it is currently under. There has never been a greater need for us to work together and do things differently.

In part two of this series, I will discuss areas for meaningful change that can make a difference in the lives of Nebraskans and help keep the health care system viable for years to come.