Experts agree: High and rising medical costs causing affordability crisis for consumers

The following information was released by the America's Health Insurance Plans (AHIP):

by AHIP

Skyrocketing prices for hospital care, doctor visits and prescription drugs are driving record healthcare spending and higher premiums and out-of-pocket expenses for Americans and employers.

U.S. healthcare spending is expected to surpass $6 trillion this year, a 6 percent increase from last year, as hospital consolidation and robust demand for specialty drugs, particularly expensive GLP-1 weight loss medications, drive up expenditures.

A new tool from Yale's Health Care Affordability Lab analyzed private health insurance premiums, growth in healthcare spending and how premium dollars are allocated both nationally and by state. Yale's findings underscore that premium growth is driven by the high and rising costs of medical care. Researchers found that higher healthcare spending accounted for 91 percent of the growth in average premiums between 2011 and 2024.

Healthcare policy stakeholders and experts agree: high and rising medical costs are the root cause of consumers' healthcare affordability challenges. Here's what they're saying:

"New federal data ... show hospital revenues were up 9.9% in the second quarter compared to last year. That is what's at the root of the affordability crisis in health care." Larry Levitt, Executive Vice President for Health Policy, KFF

"It's crystal clear we have an affordability crisis in this country. You have to look at where the money is in the system, and the number one culprit here is hospital prices, and it's been that way for quite some time." Sabrina Corlette, Research Professor and Co-director, Georgetown Center on Health Insurance Reforms

"[Consolidated hospital systems] are the biggest contributors to higher costs." Wall Street Journal Editorial Board

"Decades of evidence showing a clear and disturbing trend: the more hospital chains consolidate, the higher prices Americans pay, in their premiums and their out-of-pocket costs." Families USA

"While the [No Surprises Act] protects patients from surprise bills, most Americans nonetheless face higher costs, because the [independent dispute resolution] process is increasing overall spending and premiums." Paragon Health Institute

"[B]rand-name manufacturers use a range of tactics to keep generics out of the market, holding prices high for months or years...Delays in generic entry preserve brand-only prices and keep costs high for patients, employers, and public programs such as Medicare and Medicaid." Urban Institute

Health plans are the only part of the healthcare system with an incentive to make coverage and care as affordable as possible. Health plans are working to shield Americans from the full impact of high and rising medical costs, but common-sense policy solutions are needed to bring prices down and make coverage and care more affordable.