Healthcare Costs Are Increasing Despite Affordable Tactics

Posted by Nailah Herbert in MedicalJanuary 31, 2022(Last Updated November 24, 2022)4 min read
Key Takeaways
  • In a study conducted by the Peterson Center on Healthcare and Kaiser Family Foundation, healthcare costs have increased by a trillion dollars from 2009 to 2019.
  • The increase in healthcare costs results in higher health insurance premiums, which may lead to more people being unable to afford insurance.
  • Currently, one-third of the population does not seek medical attention because of its high costs, and 20% of Americans cannot afford health insurance. This number will only increase with the rising premiums.
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A study conducted by the Peterson Center on Healthcare and Kaiser Family Foundation revealed that healthcare costs increased by a trillion dollars from 2009 to 2019. The increasing costs of healthcare make it much more difficult for the average American to maintain the costs of a long-term health plan.  


Where Do Americans Spend Most of Their Healthcare Costs?


As healthcare costs continue to increase, it is essential to display where the majority of the costs are. Below is a table showing the corresponding portion of healthcare costs spent in each respective category according to the U.S. Centers for Medicare and Medicaid Services.



What Has Caused The Increasing Healthcare Costs?


Several factors have contributed to the high cost of medical care, making it more difficult to pay medical bills. However, the ones listed below have arguably played the most significant role in the rising costs.


Aging Population


According to the Administration of Community Living, 16% of the United States population is over the age of 65. It is projected that another 4% of the population will exceed the age of 65 in the next two decades. As a large percentage of the population is aging, it results in more healthcare spending.


prescription drugs

Image Credit: Scott Hales /


Consequently, the increasing aging population plays a role in higher insurance premiums, leading to increased out-of-pocket costs for individuals footing the bill as they rely more heavily on medical care.


Higher Medical Equipment Costs


Technology is rapidly expanding, and state-of-the-art medical equipment has become increasingly expensive over the years. As these higher advanced pieces of technology are becoming integrated into the healthcare system via being used for treatment and surgeries, the costs that hospitals charge due to the use of these types of equipment have correspondingly risen.   


COVID-19 Pandemic


The ongoing pandemic has caused detrimental effects to the economy, causing the stock market to crash, unemployment to rise, and more people to visit hospitals. As there was an influx of people waiting to receive medical care, many turned to their healthcare providers to help pay the expenses.


Thus, due to this surge in people in need of healthcare, healthcare providers used this opportunity to increase their premiums, leading to everyday Americans paying a higher portion of their income towards healthcare costs.


As seen in the table above, the majority of the healthcare costs are related to visiting hospitals or doctors. Therefore, when these medical institutions choose to increase their fees, many Americans see a rise in their healthcare premiums. 


Negative Effects of Increasing Healthcare Costs


As the reasons listed above have caused the national health system to increase the costs for the same services provided, many are left contemplating whether or not to receive medical assistance. 


In a report released by the Peter G. Peterson Foundation, it was determined that the rise in healthcare costs exceeds the levels of inflation on average. Over the past 20 years, the average increase in CPI, the determinant for measuring inflation, was 2.1%. However, medical costs are increasing at 3.5% annually. 


old couple looking at bills

Image Credit: wavebreakmedia /


This data indicates that healthcare costs are higher than the inflation rate. Americans are thus spending more of their income on healthcare costs each year. In a survey conducted by Bankrate, nearly one-third (32%) of families decided against seeking medical help due to the high costs. 


Lastly, almost 20% of the current population cannot afford healthcare due to its high costs. As healthcare costs show signs of a consistent increase, this value will likely rise in the coming years. 


Attempting to Reduce Healthcare Costs


There is no set way to reduce healthcare costs. However, there is a possible chance of your healthcare costs being reduced by executing the strategy listed below. 


One attempt at lowering healthcare costs could be through changing healthcare plans. It is important to know whether or not you frequently seek medical services. If so, it makes more sense to switch to a healthcare plan with a higher premium but a lower deductible, as the health insurance company would cover most of the costs incurred.


On the other hand, if you rarely seek medical attention, it is better to have a plan with lower monthly premiums and high deductibles. This is because you would pay less for premiums each year and pay a higher cost of care when you seek medical attention. 


The services provided by healthcare professionals are important, and no one should be concerned about not receiving medical attention due to its high costs. However, certain modifications need to be made so people of all income levels can access the same level of care.


What are your thoughts on the current healthcare system? Do you think the insurance costs are too high and expensive for some people? Let us know in the comments below.


Main image credit: DnDavis /

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