The 2 factors driving your health care costs higher and higher

Another open enrollment, another eye-popping premium increase. Why?

It’s that time of year again: open enrollment. With it comes a lot of questions: Do I go with an HMO or a PPO? Do I need an FSA or an HSA? What’s my deductible again?

It’s very confusing, but one thing is clear: The cost of your health insurance is likely going up. Premiums are growing whether you get your insurance through work, the Affordable Care Act marketplaces, or Medicare.

Of course, medical insurance has been getting more expensive for years, but KFF chief Washington correspondent Julie Rovner told me the problem is now getting worse. “We’ve had bigger inflationary spikes, particularly in the early 2000s, but for the last 15 years or so, health care costs have been rising but not terribly fast,” she said. “They seem to be accelerating again now.”

Why do our premiums keep rising? And what can we do about it? Rovner answers those questions on the latest episode of Explain It to Me, Vox’s weekly call-in podcast. Below is an excerpt of our conversation, edited for length and clarity. You can listen to the full episode on Apple Podcasts, Spotify, or wherever you get podcasts. If you’d like to submit a question, send an email to askvox@vox.com or call 1-800-618-8545.

Well, there’s a bunch of reasons, but they come down to two things: price and utilization. Utilization is how many health care services people use. The more services people use, the more the nation’s health care bill goes up. There are a lot of things that are driving expanded use right now. One of them is the aging of the baby boomers. As we get older, we use more care, and the baby boomers have been turning 65 since 2010.

Another is that, to some extent, we’re still catching up from health care that people didn’t get during the pandemic, when nobody was leaving their houses and when you basically didn’t go to the doctor unless you absolutely had to. We’re still seeing people not only getting care that they didn’t get then, but people who didn’t get care then and should have, who are sicker than they might have been if they’d gotten care in the pandemic.

Then of course there’s just new things that we can do. Everybody knows about the GLP-1 weight-loss drugs that are so popular and so highly used right now. We have a lot more new drugs. Some of these are amazing advances.

More people are getting surgery now because of medical advances. You used to have to consider how long you would be laid up if you had a joint replaced or had some kind of surgery. Now we have much easier surgeries, so it makes it much easier to do these things.

Then there’s the price side, and I can sum it up in one sentence: We have the highest prices in the world because people who provide health care here can set prices that high. The government doesn’t regulate it nearly as much as they do in other countries. Most other countries do have hybrid systems. They do use some private insurance and some government subsidies, but they also have much more serious regulation of prices than the United States has.