Health insurance coverage and costs are pressing topics for many Americans, including SmartBrief readers, who turned their attention to a number of compelling insurance news stories in July. The CMS released new data on annual health spending in the US, it was reported that Affordable Care Act marketplace premiums could jump significantly, some large employers mulled changes to their health plan offerings, and experts examined how the recent tax and spending bill could impact health insurance and patient care.
Health spending on the upswing
What happened: Data from CMS actuaries showed that as the remaining baby boomers age into Medicare, the nation’s annual health expenditures are likely to hit $8.6 trillion by the year 2033, with a 5.8% annual growth rate that outpaces the country’s gross domestic product growth rate. Driven by an aging population, Medicare spending is projected to rise by 7.8% per year, and Medicaid spending likely will grow by 6.4% a year, but legislative changes could have an impact. Currently, the US spends about $5.6 trillion a year on health care.
What’s next: The data showed that private health insurance spending is likely to grow at a slower rate this year than last year, and private payers probably will see slower enrollment growth over the period than they have in the past. Actuaries said hospital care expenditures likely will rise nearly 6% annually for the next eight years, and the rate of insured Americans is projected to be 91.3% in 2033, down 0.8% from this year.
ACA premiums also rising
What happened: An analysis by KFF Health News projected that in 2026, most of the 24 million Americans on Affordable Care Act health plans could be subject to double-digit premium hikes, as well as a sharp cut to the federal subsidies many depend on to make the coverage affordable. Insurance companies are asking for a median rate increase of 15% due to growing labor and care costs and recent policy changes. The expiration of enhanced tax credits could cause some consumers’ out-of-pocket costs to rise by more than 75%.
What’s next: “The out-of-pocket change for individuals will be immense, and many won’t actually be able to make ends meet and pay premiums, so they will go uninsured,” said JoAnn Volk of Georgetown University’s Center on Health Insurance Reforms. Some lawmakers are looking at ways to lessen the subsidy reductions. A Peterson-KFF Health tracking tool offers in-depth information on why premiums are rising, and by how much.
Employers’ health benefit challenges
What happened: Survey data by Mercer indicated that more than half of large employers were planning to pass more health insurance costs along to workers in the coming months, including higher deductibles and greater out-of-pocket minimums. Some employers are looking at nontraditional medical coverage, such as variable copay plans, while others are concerned about the cost of medications, such as GLP-1 drugs, for weight loss. “Employers project average health benefit costs to grow by nearly 6% this year, and 2026 may be even more challenging from a cost perspective,” said Mercer executive Ed Lehman.
What’s next: In August, another MedCity News analysis examined International Foundation of Employee Benefit Plans employer survey data on the same subject. The results showed there could be a median increase of 10% in employer health care costs next year, compared with the 8% that was projected for this year. When asked about the main factors in their higher medical plan costs for 2026, 31% of respondents cited catastrophic claims, 23% said specialty or high-cost prescription drugs, 15% said higher care utilization due to chronic health conditions and 11% said medical provider costs.
Government policy vs. insurance policies
What happened: By the beginning of July, the House of Representatives had signed off on a tax and spending bill that would cut about $1 trillion from federal health care spending over the next 10 years, possibly leaving 12 million more Americans without insurance by the year 2034. A Medicaid work requirement, limits on provider taxes and changes to ACA coverage were included in the measure, as was nearly $1 billion in cuts to Medicaid. Advocates expressed concern that outlying hospitals, people with low-incomes and immigrants would be most affected. President Donald Trump signed the bill into law July 4.
What’s next: The long-term care sector is likely to be among the most significantly affected, with the $1 billion in Medicaid cuts likely compromising nursing home care, a McKnight’s Long-Term Care News report found. “This legislation deals a significant blow to a core element of our country’s social safety net: Medicaid. The consequences will not be pretty,” said Katie Smith Sloan of LeadingAge.