by Jacob Rueda
The average overall cost of health insurance is expected go up in 2025, according to figures published by online lending marketplace Lending Tree. The data showed that the average overall cost of health insurance would climb to $621 a month for a person in their 40s. Other averages would depend on age and other factors.
The main reason costs are rising is the increasing cost of health care itself.
"The cost of treatments are rising," said Divya Sangameshwar, an insurance industry analyst with Lending Tree. "The cost of pharmaceuticals, that is, you have drugs that your average person consumes, they're getting more expensive."
A shortage of doctors and nurses, along with an aging population, also contribute to increased health care costs. As people age, they require more medical care. Additionally, workforce shortages, especially in rural areas, affect hospitals' ability to provide adequate patient care.
Other factors include the rising cost of research, new technologies, and production.
The data found that among the largest corporate insurers, Kaiser Permanente, Ambetter and Aetna were below the average monthly cost of health insurance, while Blue Cross Blue Shield and United Healthcare were above average.
Individuals should check with their state to see which insurers are available to them, as not all insurers operate in every area.
The most affordable insurance options outside of an employer plan are those offered under the Affordable Care Act (ACA), commonly known as "Obamacare." Coverage through the ACA is available at Healthcare.gov. Part of its affordability comes from subsidies which individuals can qualify for.
However, those subsidies, which were enacted in 2021 under the American Rescue Plan Act, are set to expire at the end of 2025.
"There has really been no indication that [Congress wants] to extend these subsidies," Sangameshwar said, "But let me tell you what's going to happen: millions of Americans are going to go uninsured because people who are dependent on these subsidies are probably going to see their income their premiums double."
According to KFF, a non-profit organization focusing on health policy, the cost of premiums could rise by an average of 79% without a congressional push to extend subsidies. And with a new administration taking office January 20, 2025, the future of the ACA is in question.
Sangameshwar said if the ACA is repealed, one of two things can happen. The first is that things go back to the way they were before the ACA was enacted. That means that insurers can deny covering pre-existing conditions and people would pay out of pocket to cover those costs.
The second option is Medicare for All, which would expand Medicare coverage to all 50 states and U.S. territories through taxes. There is opposition to the idea of Medicare for All, which was first introduced in 2003 by the late Representative John Conyers of Michigan.
Among the biggest criticisms are the tax increases required to fund it. Estimates suggest that taxes would need to be raised by 20 percent in order to fund Medicare for All.
Sangameshwar said solving the issue of government-funded healthcare will not be easy.
"Any kind of government intervention will need to be holistic," she said, "Government needs to negotiate the cost of drugs. Government needs to negotiate how much hospitals can charge for care. And that just makes this solution like a 10-headed hydra. You cut off one head and the problem continues to grow."
Despite all these and other issues, there is still a need to sign up for health insurance for anyone not already receiving it from an employer. Sangameshwar said that individuals shopping for insurance should not just focus on cost alone when choosing a plan.
"I think it's important to look at the type of plan that's offered," she said. Some plans, though cheaper, may not provide enough coverage. Meanwhile, plans in higher tiers may offer more coverage and actually be more cost-effective in the long run compared to lower-tier plans.
There is also the issue of choosing between an HMO, EPO, or PPO. Depending on the coverage area and the specific needs of the individual or family, one option may be more beneficial than the others, taking into account factors such as network restrictions, out-of-pocket costs, and provider flexibility.
For anyone left uninsured for the time being, Sangameshwar said there are still options for care.
"There are community clinics, churches run a lot of clinics," she said, "Community centers run clinics, and those clinics can offer you free, preventative checkups and primary care but at the very basic level."
As for medications, Sangameshar said individuals can find accredited online pharmacies or distributors, such as Cost Plus Drugs, to obtain medications at a lower cost. Additionally, individuals can also purchase medications directly from pharmaceutical companies at reduced prices.
The deadline to sign up for health insurance is January 15, 2025. Once enrolled, coverage begins in February. Special enrollment periods are available for individuals transitioning between jobs or for those who are pregnant.
See the interview with Divya Sangameshwar below:
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