The Rising Cost of Health Insurance Premiums

Health insurance premiums have grown out of step with the rest of the economy

Since 2011, the average premium for private health insurance has grown 78%.

Prices across the economy grew 39% over the same period.

Insurance premiums rose at twice the rate of inflation.

Increases in health care spending are driving growth in premiums

Since 2011, the average premium for private health insurance has grown from $4,008 to $7,151.

Health insurance premiums increased nearly dollar-for-dollar with health insurer spending on medical claims.

The band between the two lines is the insurer markup, the part of the premium that covers the insurer’s administrative costs and profit.

Health insurers’ markups, measured in percentage terms, have actually gone down

Between 2011 and 2024, insurers' markups, measured as a share of premiums, decreased from 19% to 15%.

Ultimately, the increase in premiums is being driven by growth in health care spending, not a higher percentage of markups.