Medical care costs are up 30% in the past decade—here’s what it means for Americans
Healthcare expenses have surged by 30% over the past decade, impacting Americans significantly. While general inflation is easing, medical costs remain steep, escalating faster than other expenses. This trend has led to 38% of Americans postponing medical care due to financial constraints in 2022, up by 12% from 2021, marking the highest since 2001. Those with severe health issues are more likely to defer treatment due to costs. Let's assess the rising healthcare expenses, citing Bureau of Labor Statistics data. An aging population is a primary factor in these rising costs. The Peter G. Peterson Foundation reported that 13% of Americans were 65 or older in 2010, increasing to 16% by 2021, with projections indicating 20% by 2030. Seniors generally incur higher healthcare costs, pushing overall expenses higher. Additional contributors include advanced technology, increased administrative spending, and hospital mergers. Despite greater healthcare spending, Americans aren't seeing proportional health improvements. Compared to other countries, the U.S. has higher per capita healthcare costs but lower life expectancy and higher obesity, diabetes, and infant mortality rates. Over the past ten years, health insurance inflation has lagged behind other indicators because policyholders enroll in plans before accessing healthcare services. Annual plan costs are fixed, necessitating insurers to absorb excess costs until they can adjust premiums. In 2024, insurance premiums are predicted to rise by 5.4%, surpassing the usual 3% to 4% increase, according to Mercer. The Peterson-KFF Health System Tracker projects a 6% hike for Affordable Care Act marketplace plans. Other factors include inflation affecting medical supplies and staff shortages in healthcare facilities, leading to wage increases. Additionally, more medical claims and heightened prescription drug costs are expected to raise insurance premiums. The Kaiser Family Foundation states that 60% of adults take at least one prescription drug, with 25% using four or more. Price hikes are particularly burdensome for the uninsured. Pharmaceutical companies adjust drug prices biannually in January and July, as per the Office of Health Policy under the Department of Health and Human Services. In 2022, price hikes were more frequent, affecting 3,239 drugs in January with an average increase of $150 per drug, and 601 drugs in July with a $250 average increase. For instance, Ativan's price rose by 7.9%, from $37.65 to $40.62 per pill, and Greenstone's Fluconazole's price soared by 1,101%, from $2 to $28 per pill. Such increases reduce affordability, and nearly 40% of those with multiple prescriptions struggle financially, according to KFF. Consequently, 30% of adults cut costs by skipping doses, splitting pills, not filling prescriptions, or using over-the-counter alternatives. Industry consolidation has also escalated prices. Kaiser analyzed various hospital mergers, finding that reduced competition often leads to higher insurer costs. In areas with only one hospital option within 15 miles, prices were 12% higher than in regions with several hospitals, limiting private insurers' ability to negotiate prices.
