It’s no secret that consumer prices are high. (Hello, gasoline.) But whether it’s housing, utilities, or food, costs across the board are continuing to rise. In fact, at 8.6%, inflation is the highest it’s been in 40 years. But according to a June 13th article by healthcare policy researcher and analyst Paul Keckley, health insurance costs are even higher.
The May CPI Report from the U.S. Bureau of Labor Statistics (BLS) reveals that healthcare prices – like services and goods – are up by 4%. In comparison, health insurance prices are up nearly 14%.
You don’t have to be a math genius to recognize the difference is a little ridiculous.
The article goes on – health insurers enjoy “tremendous clout,” and are quick to alert customers to a “lack of price transparency, waste and inexplicable variability in the performance of providers,” but when it comes to where those premium dollars go, they are suspiciously opaque.
In recent years “the spotlight has turned to [insurer] coverage and denial methods, risk-scoring and premium setting calculus, executive compensation, investment activities, member experiences and more.”
The reality is, because insurers get to raise premiums, deny claims, minimize provider reimbursements, and decide what they want to cover (seemingly on a whim), they have the upper hand. Not to mention the fact that insurers own a significant amount of patient data due to claims and hold strong negotiating ties with employers. Then there are the ones raking in the earnings in the midst of a healthcare system — and economy — still recovering from a pandemic.
It doesn’t hurt that insurers also own the majority of pharmacy benefits managers (PBMs) — middlemen who are supposed to increase price transparency and minimize consumer cost — but who, in fact, “profit from drug price escalation in the supply chain and withhold discounts negotiated with drug makers from retail pharmacies,” Keckley explains.
And while our nation is facing one of the greatest healthcare workforce shortages in history, with health systems across the country scrambling to keep their doors open, insurance companies continue to deflect blame onto physicians and hospitals.
So, in 2022, not only do patients have to worry about paying their mortgages, filling up their car, or getting their prescription medications, they now have to worry about inflated insurance premiums. They have every reason not to trust the entities entrusted to cover their care and minimize their costs.
The Keckley article concludes, “The key takeaway from the May BLS CPI report is this: healthcare prices in the last 12 months across the board have gone up and the biggest beneficiary are health insurers. Stay tuned.”
We sure will, Paul. We sure will.