Shining a Light on Health Insurance Costs

Your Biggest Black Hole Expense

For most companies, health insurance is their largest expense after payroll. But unlike any other cost, you can see how much is spent but not how it is spent. The big insurance companies don’t tell you because they don’t want you to know. That’s how they’re able to raise premiums every year without fail, regardless of your usage – and why premium costs double every 8 years.

The Cost that Defies Containment

Under the current system, health care benefits are impossible to manage because the healthcare market is opaque. Companies (and employees) find it difficult to go out and compare prices the way they would with computers, office supplies, or manufacturing inputs.

A Major Misalignment of Interests

The insurance carriers and big box brokers are on the same team. Their compensation goes up when your rates go up. That’s kind of a problem.

“We spend more on health care than coffee.”

– Howard Schultz | CEO | Starbucks

Some Statistics Illustrating the Health Care Problem:

Over 3X

The multiplier increase in healthcare costs since 1999.


The amount average family premiums have increased over the past 10 years – that’s more than double the rate of inflation (20%) and the rise in workers’ wages (26%).


How much more workers pay now vs. 10 years ago for their healthcare benefits due to significantly larger deductibles and co-pays.

500 – 1000%

How much the stocks of most insurance carriers and big box brokers have increased over the past ten years.

“Employer health coverage is leaving millions of families exposed to high and potentially unaffordable costs.”

David Blumenthal, M.D. | President | The Commonwealth Fund

Companies & Employees are Suffering, but Not the Insurance Companies

Top insurer’s stocks hit all-time highs

Combined, the nation’s top six health insurers reported $6 billion in adjusted profits for the second quarter (2017). That’s up more about 29 percent from the same quarter a year ago — far outpacing the overall S&P 500 health care sector’s growth of 8.5 percent for the quarter, according to Thomson Reuters I/B/E/S data. The strong earnings are driving share gains, with all six of the top insurers’ stocks hitting all-time highs this summer.

Profits are booming at health insurance companies

The largest health insurance companies in the United States reaped historically large profits in the first quarter of 2017, despite all the noise surrounding the Affordable Care Act’s individual marketplaces. Aetna, Anthem, Cigna, Humana and UnitedHealth Group — the big five for-profit insurers — cumulatively collected $4.5 billion in net earnings in the first three months of 2017.