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A new Yale and UW-Madison study published in JAMA Health Forum finds that premium hikes are driven by rising healthcare costs, not insurer profits. Healthcare spending accounted for 91% of premium growth between 2011 and 2024, while insurer markups actually fell. The real culprits? Drug prices and hospital consolidation.
Insurers have long been the public's go-to villain for rising health insurance premiums — but a new study says the data tells a different story. Researchers from Yale University and the University of Wisconsin-Madison analyzed premium and spending data from 2011 to 2024 and found that healthcare spending growth — not insurer profit-padding — is the dominant force behind rising premiums. The study was published in JAMA Health Forum.
Between 2011 and 2024, average premiums climbed 78.4%, while healthcare spending rose 84.2%. Insurer markups, meanwhile, actually declined — from 18.6% of premiums in 2011 to under 15% in 2024. The researchers point to rising drug costs and hospital consolidation as the primary culprits fueling spending growth.
By the Numbers:
Why it matters: With premiums squeezing workers and wages, policymakers need to target the root cause — the cost of care itself. Focusing reform efforts on insurer profits alone won't move the needle on affordability.
