Health care costs are trending up
Inflation in a post-COVID world is reaching all areas of the economy across all income brackets. Individuals and families feel growing stress about paying for necessary expenses, including health care.
In 2022, the consumer price index rose more than 8% across all spending categories. Some categories saw even larger jumps, such as food (13%), gasoline (18%) and health insurance (28%).3
But inflation isn’t the only factor that’s been raising the cost of health care over the past few decades.4
Notably, health care costs have been going up due to the rapidly aging U.S. population. Increased demand from older adults needing care for chronic conditions impacts the entire health care system, from providers and health plans to employers, individuals and families.
Technological advances also drive costs by creating treatments that are more effective but more expensive. For example, prescription drug prices have seen a substantial increase in recent years due to extensive research and development.
Health insurance cost increases aren’t expected to stop rising anytime soon. McKinsey & Company estimates health care costs will be $370 billion higher than pre-pandemic levels by 2027.5