It's not just the cost of groceries breaking the bank for American households. The cost of another necessity, healthcare, continues to climb significantly with no end in sight. The latest National Survey of Employer-Sponsored Health Plans from Mercer finds the average expenses on a healthcare plan are expected to rise by 5.8% in 2025, the third straight year of at least a 5% increase. That number rises to 9% for small employers, defined as those with fewer than 500 employees.
There are a number of factors contributing to this steady rise in healthcare costs, starting with a growing shortage of healthcare workers to meet the rising demand of aging baby boomers and Gen Xers. The report also cites consolidation in the healthcare system, which has reduced the number of hospitals in the U.S. by around 2,000 over the past two decades. Healthcare analyst David Balat agrees with those factors, but adds another important one. "When you look at the annual reports from the insurers themselves, they're showing massive profits on an annual basis," he says.
"For them to blame only the healthcare providers is just not honest," he continues. "They (insurance companies) themselves are contributing to the increases in premiums and the overall costs of healthcare."
Balat predicts the trend of rising healthcare costs will continue until we can cut out the middlemen and bureaucrats in the healthcare system. "Ultimately, the primary stakeholders in healthcare are the medical professional and the patient," he tells KTRH. "Unfortunately, we've got so many people trying to get in between those two and extract their own value, and then have to drive up the price in order to extract more and more value on a yearly basis."
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