With Lower Health Insurance Premiums on the Horizon, How Will Insurance Providers Address Increasing Costs?

 

The Congressional Business Office released a proposal to reduce health insurance premium costs. Clearsurance.com’s health insurance expert, Melanie Musson, examines potential causes and solutions for increasing insurance premiums. As open enrollment season approaches or has already begun in many places, some policyholders face the shock of drastically rising health insurance premiums. No-deductible health plans are almost expected to be expensive, but even high-deductible plans are too costly for some consumers.

The Congressional Budget Office Suggests Causes for High Insurance Premiums

The Congressional Budget Office (CBO) recently published a proposal for commercial health insurance providers in an effort to reduce insurance premiums for policyholders. The CBO is attempting to address this issue, but some disagree with the basis of some of their proposals. For example, the CBO puts much of the responsibility for higher insurance provider costs on increasingly expensive hospital and physician services.

The American Hospital Association Argues They are Not Primary Contributors Toward High Premiums

But the American Hospital Association (AHA) argues that over the past decade, hospital price growth has increased at less than half the rate of insurance premium price growth. The AHA blames higher insurance premiums on saturated markets, among other things. The CBO also attributes rising insurance premiums to market power, as well as consumers’ and employers’ lack of sensitivity to prices.

Insurance Providers Know the Cause of Higher Premiums and Should Work Toward Lowering Costs

No one understands insurance provider business costs and premium costs better than the insurance providers. And no matter how justifiable premium increases are, the current rate of increase is unsustainable. Insurance providers will lose customers and capital when consumers can no longer afford premiums. Even if hospitals argue they’re not impacting insurance provider costs, there’s no doubt that lower hospital costs would enable insurance providers to lower premiums. The disparity between what Medicare and Medicaid pay for hospital and physician services and what commercial insurers pay is significant. For example, in some states, insurance providers pay double what Medicare pays for certain services.

So, insurance providers should work with hospitals to negotiate better and more fair rates. They should also work with politicians and Medicare service providers to push for increased funding so government-sponsored health insurance will pay a competitive rate for hospitals and physicians. Across the globe, countries have health insurance structures that differ from the U.S. While a complete overhaul of the system isn’t feasible, insurance providers would be wise to study efficient systems in other countries to implement some of their practices.

Follow us on social media for the latest updates in B2B!

Image

Latest

HVAC Industry
Women in HVAC: Pioneering Change in a Male-Dominated Industry
June 24, 2025

The HVAC industry is evolving, and with it, the roles within the sector are expanding beyond traditional boundaries. Amid rising tuition costs and strong demand for skilled labor, young people are increasingly choosing trade schools over a traditional college education. With such a shift highlighting the need for a more diverse workforce, the questions…

Read More
paypal's ecosystem
Tap into the Trust Revolution with PayPal’s Ecosystem
June 23, 2025

Discover how PayPal reshapes business communication in the AI era. With decades of AI advancements lacking formal agent interactions, PayPal for Business emerges as the trusted partner you need for secure, seamless transactions. Dive into transformative strategies that propel your operations forward. What You’ll Learn Revolutionizing AI Communication with PayPal Building Trust in a…

Read More
Sarah Dawn talks PayPal Business
Transform Your Payment Processes with PayPal Business Tools
June 23, 2025

Tired of complicated payment systems? Discover how PayPal is simplifying invoicing and payment experiences for small business owners like Sarah Dawn of Swell Little Donuts. See how innovation meets reliability with PayPal’s tailored solutions. Why PayPal Matters Now In an era where seamless transactions can make or break a business, PayPal offers accessible tools…

Read More
leadership resilience
Rewriting the Odds: Leadership Resilience at the Heart of Norberto Orellana’s Rise
June 23, 2025

Economic mobility is often portrayed as a straight climb. In reality, it’s shaped by adversity, identity, and access to opportunity. As research from the University of Michigan notes, mobility requires not only income, education, and employment, but also more intangible resources such as social inclusion and power—the ability to make choices and exert influence….

Read More