More than a decade after the Affordable Care Act became law, healthcare costs are becoming more unaffordable than ever.
This year, healthcare premiums are taking the biggest jump in years, rising to unprecedented highs, and significantly impacting millions of hard-working Americans.
According to published rate increase documents, 2024 ACA Marketplace plan premium increases typically range between 2% and 10%, with a median increase of 6% – nearly twice the rate of inflation, as of October 2023 – the latest update available as of this writing.
A recent KFF study of 320 insurers covering all 50 states and the District of Columbia shows that some plan costs are increasing by 25%, 30%, and even more.
Why Are Health Insurance Premiums Going Up?
The surge in premiums can largely be attributed to the unyielding inflationary policies of the government and the brazen, profit-driven motives of giant, for-profit health conglomerates and insurance companies.
But those aren’t the only reasons.
New technology and innovation is costly, as well. For example, today’s higher insurance premiums reflect Increasing demand for costly weight-loss drugs. One recent example is Semaglutide (Ozembic). This drug was initially designed for diabetes but is seeing increasing use for weight loss.
At a pre-insurance cost of $936 per month, this drug and others like it are significantly contributing to the escalating healthcare costs.
That said, the medical, economic, and social costs of obesity over a lifetime are even more devastating.
Get Ready for Gene Therapy
Gene therapy technology is tremendously promising.
It’s also tremendously expensive.
And that is just starting to show up in health insurance premiums.
A course of treatment for some of these emerging gene therapy treatments runs from hundreds of thousands of dollars into the millions. Zolgensma costs $2.1 million, Zynteglo costs $2.8 million. Skysona costs $3 million, and Hemgenix, a gene therapy treatment for hemophilia B, costs $3.5 million.
These gene therapy treatments are still comparatively rare. But as they become more frequent, health insurance actuaries will need to account for their projected costs.
That process is already underway.
The Cost Burden Falls on the Unsubsidized
Escalating premiums disproportionately burden hard-working individuals and employers ineligible for subsidies.
Most households that don’t get health insurance from an employer or government plan – around 80% of them – receive at least some taxpayer subsidy to help them buy health insurance, in the form of premium tax credits and cost sharing reductions.
While some people benefit from subsidies, those who do not qualify end up shouldering the burden, effectively subsidizing premiums for others through their own premiums, and through their taxes.
Compare Pricing on the Best Insurance Plans Available
How to Fight the High Cost of Healthcare
Thankfully, alternatives to traditional health insurance are gaining increasing popularity. For example, health sharing communities are emerging and reaching scales that offer a combination of quality care, more cost transparency, and much more reasonable monthly costs.
Health sharing is not health insurance, but a community of people collectively helping one another with medical expenses.
Benefits of Switching to Health Sharing
- Cost Savings Compared to Traditional Health Insurance. Health sharing members enjoy lower monthly contributions compared to traditional health insurance. In fact, premiums are often 30-50% lower than traditional health insurance plans.
- Choice of Medical Provider. Health sharing allows members to choose their medical providers, offering more freedom and control over healthcare decisions.
- Community of Like-Minded People. Health sharing fosters a community of individuals with similar health-focused mindsets, providing support and encouragement.
- Greater Transparency. Health sharing promotes transparency in costs, ensuring members understand where their contributions are allocated.
Health Sharing Benefits for Small Businesses
- Immediate Cost Savings. Monthly premiums are 30 to 50 percent less than those found in traditional group health insurance plans. Pooling medical expenses among members leads to decreased overall cost.
- Employees Have More Freedom. There are no confined HMO networks; this gives employees greater liberty in selecting their preferred doctors.
- Plans Designed for Small Businesses. Adaptable enrollment options tailored to accommodate the specific requirements of small businesses gives your business the best coverage based on your needs.
How do HSAs save money?
Not only do HSAs allow you to pay less income taxes in the year you make a tax-free contribution; They also save you money when you have a qualified medical expense.
That’s because they allow you to pay with your HSA funds tax-free. Otherwise, you’d have to pay with after-tax money.
The higher your tax bracket, the more money you can save by using a health savings account.
For example: If you contribute the maximum allowable family contribution amount for 2024 (not counting catch-up contributions allowed for those age 50 and older), here’s how much you can expect to save in each tax bracket:
| Marginal Tax rate | Maximum tax savings (2024) |
|---|---|
| 20% | $1,660 |
| 25% | $2,075 |
| 30% | $2,490 |
| 35% | $2,905 |
That’s just on the front end.
Let’s say you have to have a hip replacement done. Your provider tells you it will cost $30,000. You comparison shop using price transparency data at several other area providers and you find this pricing to be the best value.
You have a health insurance policy with a $5,000 deductible, and a 20% co-insurance, with a total maximum out-of-pocket cost of $8,000.
You schedule the surgery. You pay the first $5,000, and then 20% of the remainder until the total you pay reaches $8,000. After that point, your insurance company pays the rest.
If you use your HSA to pay these costs, here’s what you will save, at these same tax brackets:
HSA Tax Savings (on a $30,000 hip replacement, with an 80/20 (Gold tier) plan with an $8,000 maximum out-of-pocket)
| Marginal Tax rate | Maximum tax savings (2024) |
|---|---|
| 20% | $1,600 |
| 25% | $2,000 |
| 30% | $2,400 |
| 35% | $2,800 |
Note: You can combine the best features of HDHPs and the benefits of health sharing by joining the HSA Secure health sharing plan. This is a health sharing plan specifically designed to preserve eligibility for HSA contributions.
More on combining HSAs, health sharing, and other cost-saving strategies below.
Click Here to Learn More About HSA Secure, Get a Quote, or Self-Enroll.
People Also Ask:
How Much Can I Contribute to an HSA?
The HSA contribution limits for 2024 are $4,150 for self-only coverage and $8,300 for family coverage. Those 55 and older can contribute an additional $1,000 as a catch-up contribution.
What constitutes a qualified medical expense for HSAs?
See IRS Publication 502 – Medical and Dental Expenses for a full explanation of medical and dental expenses.
Join a Direct Primary Care Practice
Direct Primary Care (DPC) is rapidly changing the way Americans access family-level primary care – for the better.
With direct primary care, you pay a flat, monthly fee directly to your doctor’s practice. healthcare provider.
In exchange, you get as many primary care visits as you need. This includes things like consultations, visits, medication management, chronic condition management, preventive care, well-baby visits, sick note visits and verification, and routine check-ups.
The monthly subscription covers everything. There are no additional deductibles, copays, or other surprise charges.
For that reason, you don’t need to worry about costs to go see your doctor. You don’t need to put off or skip the care you need – which risks creating even bigger health problems down the road.
DPC stands out because it bypasses traditional insurance models, fostering a more direct relationship between patients and physicians.
Benefits of Direct Primary Care
- Personalized Care. With DPC, you get more time with your doctor during visits. In fact DPC patients get as much as twice the amount of face-to-face time with their doctors per appointment compared to patients at traditional insurance based practices. This means personalized care tailored to your specific health needs.
- Savings. DPC memberships can save significant amounts of money, particularly for people who need to see their doctor often. Deductible, co-pays, and other costs add up with frequent visits. But these costs go away for DPC members. People who can particularly benefit from DPC membership include families with children, people who take a lot of medications, people with pre-existing conditions that need ongoing management such as diabetes, people with immunological issues, and people who get frequent colds, flus, and minor injuries and ailments.
- Predictable Costs. A flat monthly fee eliminates surprise bills. You know exactly what you’re paying for each month.
- Accessibility. DPC often allows for more accessible communication with your healthcare provider, including phone or virtual consultations.
- Preventive Focus. Emphasis on preventive care helps in early detection of health issues, potentially reducing long-term healthcare costs.
By prioritizing preventive care and direct access to healthcare providers, DPC can help reduce the need for expensive specialist visits and procedures.
The DPC model is particularly beneficial for managing chronic conditions, where regular, consistent care can lead to better health outcomes and reduced overall healthcare costs.
Direct primary care plans go very well as a supplement to health sharing plans such as DPC Direct, as well as high-deductible health plans.
DPC membership costs are not tax-deductible, and are not a substitute for a major medical health insurance or health sharing plan. However, in most cases, their benefits more than outweigh the lack of a tax deduction. Especially for those in lower tax-brackets.
Read More: The HSA for America Complete Guide to Direct Primary Care
Compare Pricing on the Best HealthShare Plans Available
Use These Powerful Tools to Maximize Healthcare Freedom
Using these money-saving strategies lets you maximize savings and cost-efficiency, while also enabling you to escape the narrow care networks imposed by traditional HMOs: Most health share plans let you use your benefits with any doctor.
HSAs empower individuals to save for medical expenses tax-free, giving them more control over healthcare choices and costs.
Small business owners can also provide employees excellent health benefits at a fair price, that are HSA-qualified.
Health Sharing is an innovative option for individuals, families, and business and can save money while connecting you to a community of like-minded people.
Utilize Direct Primary Care to provide you affordable care and the time and attention you deserve from your provider.
Click here to talk with one of our personal benefits managers and get a free quote!
For Further Reading: HSA for America Helps Small Businesses Save Thousands on Health Benefit Costs | How Much Money Can Health Sharing Save? | Why People Who Understand the Numbers Love Health Sharing | Understanding HSA-Eligible Plans | CareCredit Review: Is it a Good Deal?
