Most Americans have health coverage through private (also called “commercial”) insurance. The prices for healthcare paid by private insurance are significantly higher than those of public programs and in other nations. At the same time, private insurance premiums continue to skyrocket, with dire consequences for Americans’ financial security.
These eight charts clarify some of the recent trends in healthcare pricing. Over the past two decades, hospital prices—the largest component of national health spending—have been a key driver of spending by private insurers. However, they are not the sole reason U.S. healthcare costs are high. High prescription drug costs, administrative costs, and cost increases stemming from consolidation and corporatization in healthcare, among others, contribute as well.
These charts do not convey causal relationships but only relative increases in cost metrics. While the first two charts take a longer historical view, the rest focus on the past decade as policy makers chart a path for the next decade.
Private Insurance Premiums Outstrip Americans’ Wage Growth
Most Americans are covered by employer-sponsored insurance and the cost of that coverage has risen rapidly. From 1999 to 2024, the total family premium (employer and employee share) increased by 342 percent, nearly three times the increase in mean worker earnings (119 percent). (See Figure 1.) Since the employer share and the worker share of premiums both come from the same bucket of resources (company employee compensation), this increase in health insurance prices has created a drag on wage growth—eating up as much as 20 percent of wage growth from 2025 to 2026 in manufacturing and service industry jobs, according to one analysis. In other words, workers are hurt by excessive insurance cost growth, as the more a company pays for health insurance for its workforce, the less it has for other forms of compensation, such as salaries and bonuses.
FIGURE 1
Hospitals Prices Grew More Than Drug and Insurance Prices
Most people blame high health costs on drug and insurance companies. Indeed, their prices have been increasing rapidly. However, over the past twenty years, hospital price growth has exceeded those of other services and prices, including those of prescription drugs and health insurance. (See Figure 2.)
FIGURE 2
Private Insurance Prices Increased More Than Medicare’s
Narrowing the focus to the past decade, the number of people with private health insurance increased due to Affordable Care Act policies starting in 2010, which increased competition and purchasing power. However, over the past decade, the cumulative price increases for healthcare services paid by private insurance was 32 percent. (See Figure 3.) The prices paid by the Medicare program rose only 22 percent over the same period.
FIGURE 3
Private Insurance Prices Paid to Hospitals Also Grew Faster than Medicare’s
These two separate trends—of high growth in hospital prices and in private insurance prices—persist when looked at together. Over the past decade, hospital prices paid by private insurance increased by about 40 percent, compared to 30 percent for Medicare—about one-third faster. (See Figure 4.)
FIGURE 4
Increases in Hospital Prices Not Driven by Higher Staff Wages
One theory on why hospital prices have skyrocketed is higher wage costs for doctors, nurses, and other patient care staff. Wages in healthcare and other sectors did increase during and after the pandemic. However, data show that direct patient care labor costs between 2016 and 2024 actually fell as a percentage of operating expenses, from 33 percent to 30 percent, thus failing to account for high hospital price growth. (See Figure 5).
FIGURE 5
Fewer Hospitals Are Independent
Another explanation for the high growth in hospital prices is the merger of independent hospitals into large systems or corporations. The percent of independent hospitals fell from 34 percent in 2016 to 30 percent in 2024. (See Figure 6.) Between 2015 and 2024, 65 percent of metropolitan areas experienced an increase in hospital concentration, on top of 15 percent that already had hospital monopolies. Research suggests consolidation gives hospitals increased negotiating power with insurers. Indeed, the number of public disputes between insurers and hospitals has gone up, as has the number of insurers buying hospitals to prevent such disputes and block out competitors.
FIGURE 6
As Hospitals Consolidate, Some Key Services Decline
Proponents of hospital systems argue that such systems support critical services in underserved communities. The results are mixed on this, with access to some rural services increasing (for example, colonoscopy and enrollment assistance) and access to others going down (for example, hospital-based long-term care). In particular, the percentage of rural hospitals providing maternity care has fallen faster than that of urban hospitals, with the decline (16 percent) exceeding the reduction in the U.S. crude birth rate from 2016 to 2023 (12 percent). (See Figure 7.)
FIGURE 7
Hospital Lobbying Has Increased Rapidly
While lobbying from the pharmaceutical industry topped all sectors (including the petroleum industry and banking) in 2025, hospitals and nursing homes ranked sixth highest. This sector’s spending on lobbying increased cumulatively by 34 percent, compared to 23 percent for health profession lobbying. (See Figure 8.) Hospitals’ spending on lobbying increased $67 million more over the past decade than if it had just risen with inflation. Among the American Hospital Association’s (AHA) priorities for 2025 was preventing payment rate reductions (for example, by limiting facility fees, site-neutral payments). The AHA also have publicly refuted analyses of excessive prices from academics, consumer advocates, and even right-of-center think tanks.
FIGURE 8
Conclusion
These figures aim to convey the growing problem of private health insurance prices, driven in large part by rising hospital prices, consolidation, and lobbying. Policy makers are called to address this problem not just because of its implications for access to healthcare, but for Americans’ financial security.
Tags: insurance premiums, hospitals, private health insurance, commercial insurance
Follow the Money: Charting Private Health Insurance Cost Growth
Most Americans have health coverage through private (also called “commercial”) insurance. The prices for healthcare paid by private insurance are significantly higher than those of public programs and in other nations. At the same time, private insurance premiums continue to skyrocket, with dire consequences for Americans’ financial security.
These eight charts clarify some of the recent trends in healthcare pricing. Over the past two decades, hospital prices—the largest component of national health spending—have been a key driver of spending by private insurers. However, they are not the sole reason U.S. healthcare costs are high. High prescription drug costs, administrative costs, and cost increases stemming from consolidation and corporatization in healthcare, among others, contribute as well.
These charts do not convey causal relationships but only relative increases in cost metrics. While the first two charts take a longer historical view, the rest focus on the past decade as policy makers chart a path for the next decade.
Private Insurance Premiums Outstrip Americans’ Wage Growth
Most Americans are covered by employer-sponsored insurance and the cost of that coverage has risen rapidly. From 1999 to 2024, the total family premium (employer and employee share) increased by 342 percent, nearly three times the increase in mean worker earnings (119 percent). (See Figure 1.) Since the employer share and the worker share of premiums both come from the same bucket of resources (company employee compensation), this increase in health insurance prices has created a drag on wage growth—eating up as much as 20 percent of wage growth from 2025 to 2026 in manufacturing and service industry jobs, according to one analysis. In other words, workers are hurt by excessive insurance cost growth, as the more a company pays for health insurance for its workforce, the less it has for other forms of compensation, such as salaries and bonuses.
FIGURE 1
Hospitals Prices Grew More Than Drug and Insurance Prices
Most people blame high health costs on drug and insurance companies. Indeed, their prices have been increasing rapidly. However, over the past twenty years, hospital price growth has exceeded those of other services and prices, including those of prescription drugs and health insurance. (See Figure 2.)
FIGURE 2
Private Insurance Prices Increased More Than Medicare’s
Narrowing the focus to the past decade, the number of people with private health insurance increased due to Affordable Care Act policies starting in 2010, which increased competition and purchasing power. However, over the past decade, the cumulative price increases for healthcare services paid by private insurance was 32 percent. (See Figure 3.) The prices paid by the Medicare program rose only 22 percent over the same period.
FIGURE 3
Private Insurance Prices Paid to Hospitals Also Grew Faster than Medicare’s
These two separate trends—of high growth in hospital prices and in private insurance prices—persist when looked at together. Over the past decade, hospital prices paid by private insurance increased by about 40 percent, compared to 30 percent for Medicare—about one-third faster. (See Figure 4.)
FIGURE 4
Increases in Hospital Prices Not Driven by Higher Staff Wages
One theory on why hospital prices have skyrocketed is higher wage costs for doctors, nurses, and other patient care staff. Wages in healthcare and other sectors did increase during and after the pandemic. However, data show that direct patient care labor costs between 2016 and 2024 actually fell as a percentage of operating expenses, from 33 percent to 30 percent, thus failing to account for high hospital price growth. (See Figure 5).
FIGURE 5
Fewer Hospitals Are Independent
Another explanation for the high growth in hospital prices is the merger of independent hospitals into large systems or corporations. The percent of independent hospitals fell from 34 percent in 2016 to 30 percent in 2024. (See Figure 6.) Between 2015 and 2024, 65 percent of metropolitan areas experienced an increase in hospital concentration, on top of 15 percent that already had hospital monopolies. Research suggests consolidation gives hospitals increased negotiating power with insurers. Indeed, the number of public disputes between insurers and hospitals has gone up, as has the number of insurers buying hospitals to prevent such disputes and block out competitors.
FIGURE 6
As Hospitals Consolidate, Some Key Services Decline
Proponents of hospital systems argue that such systems support critical services in underserved communities. The results are mixed on this, with access to some rural services increasing (for example, colonoscopy and enrollment assistance) and access to others going down (for example, hospital-based long-term care). In particular, the percentage of rural hospitals providing maternity care has fallen faster than that of urban hospitals, with the decline (16 percent) exceeding the reduction in the U.S. crude birth rate from 2016 to 2023 (12 percent). (See Figure 7.)
FIGURE 7
Hospital Lobbying Has Increased Rapidly
While lobbying from the pharmaceutical industry topped all sectors (including the petroleum industry and banking) in 2025, hospitals and nursing homes1 ranked sixth highest. This sector’s spending on lobbying increased cumulatively by 34 percent, compared to 23 percent for health profession lobbying. (See Figure 8.) Hospitals’ spending on lobbying increased $67 million more over the past decade than if it had just risen with inflation. Among the American Hospital Association’s (AHA) priorities for 2025 was preventing payment rate reductions (for example, by limiting facility fees, site-neutral payments). The AHA also have publicly refuted analyses of excessive prices from academics, consumer advocates, and even right-of-center think tanks.
FIGURE 8
Conclusion
These figures aim to convey the growing problem of private health insurance prices, driven in large part by rising hospital prices, consolidation, and lobbying. Policy makers are called to address this problem not just because of its implications for access to healthcare, but for Americans’ financial security.
Notes
Tags: insurance premiums, hospitals, private health insurance, commercial insurance