Health insurance premiums rose nearly 3x the rate of worker earnings over the past 25 years

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Health insurance premiums rose nearly 3x the rate of worker earnings over the past 25 years
Published: December 8, 2025 11:02am EST

Vivian Ho
Professor and Chair of Health Economics, Rice University
Salpy Kanimian
Ph.D. Candidate in Economics, Rice University


(The Conversation) Health insurance premiums in the U.S. significantly increased between 1999 and 2024, outpacing the rate of worker earnings by three times, according to our newly published research in the journal JAMA Network Open.

Premiums can rise if the costs of the medical services they cover increase. Using consumer price indices for the main components of medical care – such as services provided in clinics and hospitals as well as administrative expenses – based on federal data and data from the Kaiser Family Foundation, we found that the cost of hospital services increased the most, while the cost of physician services and prescription drugs rose more slowly.

Some of the premium increases can be attributed to an increase in hospital outpatient visits and coverage of GLP-1 drugs. But research, including our own, suggests that premiums have rapidly escalated mostly because health system consolidation – when hospitals and other health care entities merge – has led hospitals to raise prices well above their costs.

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One study found that for nonprofit health systems, the greatest pay increases between 2012 and 2019 went to hospital CEOs who grew the profits and size of their organizations the most. However, the financial reward of delivering above-average quality of care declined. Increased charity care – free or discounted health services nonprofit hospitals must provide some of their patients who cannot afford medical care – was not significantly tied to CEO compensation. .......................(more)

https://theconversation.com/health-insurance-premiums-rose-nearly-3x-the-rate-of-worker-earnings-over-the-past-25-years-271450