Health Care Spending Growth Drove 91% of U.S. Premium Increases 2011-2024

The study examined annual state-level premiums, total health spending, and insurer markups in the large-group, small-group, and individual markets. Premiums rose 78.4% while spending increased 84.2%; markups fell from 19% to 15% of premiums, indicating nearly dollar-for-dollar pass-through of provider and facility costs rather than insurer profits. Employer-sponsored coverage, which insured 54% of adults in 2025, transmits these costs into lower wages and employment outside health care.

Kaiser Family Foundation data show 48% of directly purchased policies already strain household budgets. The observed pattern aligns with prior work linking premium growth to reduced hiring in non-health sectors and widening income inequality. Because MLR rules cap administrative retention, further premium moderation requires direct restraint on unit prices and utilization.

States with the highest per-person premiums, such as Alaska at $11,438, illustrate the widest spending gaps. Next steps include linking Medicare site-neutral payments and state all-payer rate-setting experiments to test whether slower spending growth translates into measurable premium relief by 2028.