Health Insurance

How to Navigate the Rising Costs of Health Insurance Premiums

Health insurance is an essential financial safety net that protects individuals and families from the high costs of medical care. However, as healthcare costs continue to rise, so do health insurance premiums. 

Managing these rising costs can be difficult, but it can be done. With thorough preparation and smart strategies, healthcare expenses can be handled without compromising on employee coverage. 

Why Health Insurance Costs Rise

On average, health insurance premiums go up for several reasons. These can be general market conditions, a change in your plan type, the age of your employees, and where your workers live. All of these factors have an impact on your premium price.

Another primary reason behind the rise in health insurance costs is the rise in medical expenses. According to PwC’s Health Research Institute, healthcare costs will increase by a further 7% in 2024.

As your employees get older and move to areas with fewer health resources, and the cost of things like prescription drugs and medical services rise, your health insurance company will raise their rates to make up the difference.

The hard part about these rate increases is that many of the factors causing them are unavoidable. You can’t stop your employees from having birthdays, moving to another ZIP code, or anything else that puts them at greater health risk in the eyes of your health insurance company. So when your rate goes up, it’s there to stay.

Steps to Manage Rising Health Insurance Costs

1. Understand Your Health Insurance Plan:

  • Review your health insurance plan in detail, including coverage, deductibles, copayments, and coinsurance.
  • Understand the factors that affect your premium, such as age, location, and coverage level.
  • Know the difference between different types of health insurance plans to choose the most cost-effective option for your needs.

2. Shop Around for the Best Rates:

  • Compare health insurance plans from multiple providers to find the most affordable option.
  • Use online comparison tools to compare premiums, deductibles, and coverage options.
  • Look for health insurance plans that offer discounts for healthy behaviors, such as regular exercise or non-smoking, or for wellness plans.

3. Feel free to Switch medical carriers mid-year

Employers are often under the misconception that “shopping for their plan” every year via a bidding process is a good strategy for getting the most economical medical coverage at the best rates. 

Bidding insurance plans on a semi-regular basis can be an excellent strategy for encouraging competition and striving for the best price, balanced with the best coverage. 

Select a plan with a carrier that delivers value from the start and offers minimal incremental increases, rather than a carrier that provides a terrific “starting” price but is increasing rates substantially in year two or three.

It is possible to switch carriers mid-year. Many employers mistakenly assume they must wait until the end of a plan year to make a switch. Suppose an employer is dissatisfied with current coverage or costs. In that case, it is possible to change carriers at any time to alter a benefit plan design or to consider more flexible funding options. 

There may be restrictions to these changes, so check your current plan for any restrictions or penalties. Even if your car

4. Reconsider your pharmacy plan design

The high and growing cost of prescription drugs already imposes a financial drain on employees and on employers that want to sponsor health benefits. 

Pharmacy costs are one of the fastest-growing segments of healthcare expenditures. The trajectory of these increases will not reduce, mainly due to the explosive rise in costs of specialized medicines and the additional costs of generic medications.

By adjusting formulations, brokers and pharmacy benefit managers can work together to reduce medicine costs. This helps to reduce the categorization and tiered pricing of prescription drugs, which are usually part of most insurance plans. 

Doing this can also help bring down the costs of long-term employee benefits by aiding patients in achieving better outcomes through greater access to the appropriate medications.

5. Consider Other Cost-Saving Measures:

  • Look for health insurance plans that offer telemedicine services, which can save you money on office visits.
  • Use generic prescription drugs instead of brand-name drugs whenever possible to save on medication costs.
  • Take advantage of wellness programs offered under your health insurance plan to stay healthy and inhibit costly medical conditions.

6. Review Your Coverage Regularly:

  • Regularly review your health insurance coverage to make sure it still meets your needs.
  • Consider adjusting your coverage as your health and financial situation change to avoid overpaying for services you don’t need.

7. Institute disciplined wellness programs

  • Offering a wellness program is a significant first step in containing healthcare costs with programs focused on early detection, prevention, and care adherence.
  • Encouraging preventive care, including age-appropriate screenings and immunizations, medication, and care adherence for chronic conditions, can affect costs substantially. Rewarding healthy lifestyles while modifying unhealthy behaviors will deliver sustainable, long-term savings.


Navigating the rising costs of health insurance premiums requires careful planning and informed decision-making. By understanding your health insurance plan, shopping around for the best rates, considering high-deductible health plans, taking advantage of health savings accounts, and reviewing your coverage regularly, you can effectively manage your health insurance costs while maintaining quality coverage.

This post was last modified on April 22, 2024 11:04 am

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