Inflation Isn’t Going Away

The current state of our economy is not great, despite supposedly low unemployment and decent headline growth rates.  We have a lot of rottenness under the surface.  There is a massive amount of debt–federal, state, pension plans, private companies, credit card.  Interest rates are not super high, but are above levels that persisted for years.  Inflation lingers.  And inflation will stay high, partly because interest rates are up.  And one component of consumer spending that is definitely on the way up is health care and health insurance.  Employees who are re-enrolling for health insurance at the workplace and getting substantial premium increases.  The portion that the employer pays factors into the prices charged for that employer’s products or services.  Driving insurance premiums higher is the steady rise in prices charged by hospitals, physicians, drug companies and other providers.

A new report from WillisTowersWatson is the latest from a large benefit consultant to indicate hefty increases in spending are coming for 2025.  This report looks at global trends in health spending, finding a likely rise of around 9% for North America.  Higher increases are actually projected for other parts of the world, as much as 12% in the Mideast and Asia.  More expensive drugs and biologic treatments and more mental health care are listed as major factors in the cost increases.   (WTW Report)