By Chris W. Durkin, RHU, REBC, President and CEO of FBC Insurance, Benefits & Consulting

I have often responded to the question in the headline with one of my own: if your current plan would remain at your current rate, would that be manageable? After a pause, most folks agree they could handle their current healthcare cost if they would just stop going up.

So, this raises two questions: why are rates so high in the first place, and why do they keep going up?


Let’s start at the beginning. The cost of healthcare is subject to the same laws of supply and demand as the rest of our economy. If less of us started needing or wanting to get healthcare, over time we would see the cost of services go down. However, an aging population and increasing levels of obesity are just two reasons we won’t experience that any time soon.

This idea prompts some folks to focus on wellness as a business concept. This is very worthwhile but is only part of the issue which needs addressed. We do recommend wellness as an integrated part of a healthcare program. However, aging has a predictable effect on the use of healthcare and we will keep getting older as a nation until 2023, when the baby boom peaks. In addition, 35% of the U.S. population is clinically obese. This will also have an impact on healthcare costs moving forward.

The U.S. healthcare system is embedded in a free enterprise economy and as such, those providing healthcare products and services are financially rewarded for developing better solutions for health care. For this reason, new drugs, surgeries, therapies, and treatments are constantly being developed and being made available both through both commercial and tax-supported health plans. At the end of the day, it seems that no one is ready to die.


Here is where this gets interesting. If we had a national mindset to stop improving our healthcare system and just live with the state-of-the-art healthcare we have, we would dramatically slow down the increase in healthcare costs. However, that runs contrary to our values and our desire to increase the quality of healthcare.

In fact, the United States has a unique paradigm in the world regarding healthcare. Each of us believes we should have the best level of healthcare with all the newest and best drugs, surgeries, therapies, and treatments and these should be covered by our healthcare plan (both public and private) even if the drugs, surgeries, therapies, and treatments didn’t yet exist before we bought our health plans.

To think about how this impacts costs, try this analogy: We buy a car with the latest bells and whistles. However, we also expect the car company to add every new upgrade that is later invented to the car at no additional cost to us. Needless to say, I don’t see a car manufacturer being too enthusiastic about that deal.

Insurance companies are in the position of fulfilling this expectation and have only the remedy of an annual rate increase to recoup the costs they experience every month. The FDA approves 17 new prescriptions each month, and you know we want them on the formulary as soon as our doctor prescribes them.

So, not only is healthcare subject to its own rate of inflation, but—depending on emerging technologies—it is also wildly unpredictable.


Some have promoted a single-payer plan as a solution, with the U.S. government as the payer.

In theory, that offers at least one advantage: there would be one entity which could limit the growth of the costs by deciding what would and would not be covered. However, no matter what form single-payer takes, it becomes de facto rationing. I would suggest that is just not something the U.S. population would embrace even if it allowed our healthcare costs to more closely mirror general inflation.

So, the conversation turns to how and who: How do we pay for it and who among us pay for it?

I would offer this: We have the national resources to pay for our healthcare through either, or both, our tax system and our free enterprise economy. Today, approximately 60% for all U.S. healthcare costs are paid through the tax system. I vote we figure this out without adding to the national debt!

This discussion will continue on the national stage. For my thoughts on the ACA and its impact on our national healthcare system, download our white paper: “The Affordable Care Act: Its Past, Present, and Future”. We welcome your thoughts and comments!

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