Beyond inflation, the reasons behind the increase in health insurance costs is to be found in the fallout from covid. The pandemic drove up costs for insurers that had to pay for testing, treatment, and vaccines without out-of-pocket charges and copays for patients. Now, those expenses are being paid by policy holders under the guise of increased premiums. In 2021, for instance, this caused an estimated increase of 8.4% on premiums on the Affordable Care Act marketplace.
This doesn’t mean, however, that the actual cost of policies went up by 28%. Since tracking the cost of insurance is complicated, the BLS does so by measuring the profits of health insurance companies—if those go up, consumer health insurance prices are assumed to go up, too. Yet the trend usually has a sharp correction toward the end of the year, when insurance companies also share information on the costs of services they provided, which lower their profits.
Still, according to the latest predictions by the consulting firm Mercer, health insurance prices are not done rising, and will go up even more significantly in 2023. Employer-based coverage especially, which has so far only had moderate increases (4.4%) is expected to go up by an additional 5% in the coming year.