Health Insurance Costs Rising: Tips to Save Thousands

Health insurance costs have surged significantly in recent years, and projections suggest this trend will continue. According to Dermot Wells, the Head of Health & General Insurance at Cornmarket, many individuals are likely overpaying for their insurance plans, potentially by thousands of dollars.

Wells highlighted that for those who have remained on the same health insurance plan, premiums have increased anywhere from 30% to 75% over the past three years, depending on the specific plan. He noted, “The bad news is, there’s more rate increases to come.”

A major concern is the reluctance among consumers to switch plans, even when cheaper and comparable options are available. Wells remarked, “People are afraid. It’s this loss aversion; they think they’re going to lose something if they switch.” His insights reveal a striking statistic: 89% of individuals have renewed their policies with the same insurer in the last three years. Furthermore, 65% to 68% have continued with the same plan, despite the notable price increases.

This trend has left many consumers paying “hundreds, if not thousands more, than we need to,” according to Wells. He explained that approximately 50% of policyholders are on what he calls a “legacy plan.” These plans are often outdated, sometimes between seven and ten years old, and while they may still offer good coverage, they are frequently overpriced.

Wells pointed out that older plans might include coverage for services that holders are unlikely to use, further adding to the unnecessary costs. He encouraged consumers to review their insurance options regularly and consider switching to plans that better match their current needs and budgets.

As health insurance rates continue to rise, informed choices become crucial for consumers wanting to manage their expenditures effectively. By understanding the dynamics of their insurance plans and the market, individuals can potentially save substantial amounts while still securing the coverage they require.