Health care keeps getting more expensive, and it's creating growing concern.

A challenge: When people delay care because of cost, small health issues are more likely to become serious — and far more expensive — problems later.

• 36% of adults say they've skipped doctor appointments in the past year because of cost.

Adding to the concerns about overall affordability is the fact that health insurance premiums are swiftly rising as well.

There is a misconception that health plan premiums are prepayments for care — they are not. Premiums are payments into a shared risk pool, similar to auto insurance, and they reflect the price of overall health care, so when care costs rise, your premiums follow.

• Adding to the frustration: These premium costs are climbing. Family premiums have risen 52% in the last 10 years, leading the U.S. to spend over $5 trillion a year on health care.

The positive news: Health providers like Elevance Health are changing the structure of their health plans to be more accessible for patients — aiming to boost affordability and improve health outcomes.

Behind the higher costs

Premiums rise with the overall cost of health care, so when hospital visits, drug prices and specialty therapies increase, the cost shows up in what members pay out of pocket.

Hospital care and prescription drugs are among the fastest-growing drivers of overall health care spending.

• Key numbers: Hospital spending jumped 10% in 2023 and 2024 — the fastest rate in over three decades, and prescription drug spending rose 8% in 2024.

Several features of today's health care system make these rising costs harder to rein in:

• System complexity.
• Limited data sharing.
• Fraud, waste, abuse and regulatory inefficiencies.

Federal policies that result in more complexity for the health care system also make it harder to address this issue.

An example: The No Surprises Act was put in place to protect patients from unexpected medical bills for emergencies and out-of-network care.

In reality, it has created loopholes allowing out-of-network providers to charge 3-4x more than standard in-network rates and greatly increased payment disputes — which can lead to higher premiums as costs go up.

• An expert take: "When this bill was passed, the federal government expected 17,000 of these cases to come through a year. Instead, we've seen millions — and Elevance Health affiliated plans see 17,000 of these a month alone," says Dr. Catherine Gaffigan, president of Elevance Health's health solutions business.
• This has the potential to trickle down and increase patient premiums over time, as premium rates rise to cover the higher medical prices.

What Elevance Health is saying

Elevance Health is helping to reform the health care system to lower costs and simplify the ways members navigate health plans.

1. Aligning coverage with cost and outcomes: This means designing coverage that manages rising medical and pharmacy costs and opening the door for patients to choose high-quality care at lower-cost sites.

• An example: A published study conducted by Elevance Health found non-oncology infusion therapy in hospital outpatient departments costs 42% more than alternative care settings — despite patient outcomes being the same at both locations.
• The shift → Health plans prioritizing lower cost treatments and sites when outcomes are the same can lower overall spending without sacrificing quality.

2. Creating a connected community: Clear and consistent coordination across health plans, providers and regulators.

• An example: An Elevance Health-sponsored analysis found that Medicare could have saved $7 billion over five years on select services prone to abuse if Medicare Advantage-style safeguards and fraud detection tools were used.

• The shift → This type of communication and full system alignment helps reduce waste and deliver care that doesn't drive the health care system costs up.

3. Expanding the focus of traditional health care: Traditional health care largely focuses on just medical care and physical factors, but data shows that food access, housing stability and mental health impact patient health outcomes and costs.

• The shift → Health plans that use data early to identify what works for patients, eliminate barriers to health, help personalize care and prevent expensive interventions later.

Next steps

These changes from insurers are improving affordability, but lasting and meaningful cost relief hinges on changes across the system, particularly from policymakers, hospitals and regulators.

• Policymakers and regulators: Must support policies that allow providers and health plans to share data in real time, helping care become more rooted in evidence, safety and affordability, instead of relying on fragmented information.
• Hospital administrators: By increasing hospital price transparency and more site-neutral payments, patients won't be pigeonholed into expensive sites of care when outcomes are the same, no matter the location.
• Federal agencies: Making sure the No Surprises Act works as it was intended to — protecting patients from unexpected bills — instead of driving up health care costs across the system.

The takeaway: Boosting affordability requires systemic change in how health care operates — with insurers like Elevance Health working alongside policymakers, providers and regulators to lower medical costs, reduce waste and better align care with patient needs.

Learn more.

Sources:

A) Infusion therapy patient outcomes are similar at reduced costs in alternative sites of care compared with hospital outpatient departments

B) Medicare Could Have Saved $7.0 Billion in Spending on Select Services Subject to Fraud, Waste, and Abuse if MA Techniques Had Been Employed

C) Arbitration Outcomes for Out-of-Network Medical Bills Under the No Surprises Act