As healthcare costs continue to rise, some industries face particularly high premiums for family health plans. Based on 2024 data, here are the top three industries with the most expensive family health plans:

1. Health Care Industry (PPO)

• Monthly Premium: $2,329

• Annual Premium: $27,951

2. Finance Industry (PPO)

• Monthly Premium: $2,327

• Annual Premium: $27,923

3. Transportation/Communications/Utilities (HDHP)

• Monthly Premium: $2,321

• Annual Premium: $27,848

These costs reflect the financial burden faced by employees and employers alike, especially in sectors like healthcare, which itself grapples with rising service costs. The finance and transportation sectors also show how critical yet costly healthcare benefits have become.

What Drives These Costs?

One major force driving up premiums is the complex system of hidden costs within the insurance industry. Insurers often engage in practices that obscure the true cost of healthcare. For example, rebates play a large role in inflating drug prices. Insurers and pharmacy benefit managers (PBMs) often negotiate rebates with drug manufacturers, a process that isn’t always transparent to consumers.

Here’s how it works:

• Rebates: Insurers and PBMs negotiate with drug manufacturers to secure rebates on prescription medications. In return, these medications are included in the insurer’s formulary (a list of covered drugs).

• Impact on Prices: To offset the cost of rebates, drug manufacturers are forced to increase the list prices of medications. This means the true cost of drugs rises significantly, but the discounts and rebates that PBMs secure do not always translate to lower prices for consumers. Instead, they tend to increase insurer profits.

• Higher Premiums: Since healthcare providers, employers, and consumers are largely unaware of these behind-the-scenes negotiations, they end up paying higher premiums as drug prices and overall healthcare costs rise.

These hidden costs and opaque pricing structures, especially in the pharmaceutical sector, play a key role in pushing insurance premiums higher. When drug manufacturers raise prices to account for large rebates paid to PBMs, those costs are often passed down to employers and employees in the form of higher premiums.

Why It Matters for Families

For families, these high premiums can be a significant financial challenge, especially as wages may not rise in parallel with healthcare costs. While employers typically share the cost of premiums, the employee's contribution can still take a large chunk out of a family's monthly budget. Exploring alternatives such as cost plus pharmacy and direct primary physicians can offer dramatic savings.

Looking Ahead

As we move further into 2024, it's important for both employers and employees to stay informed about the changing landscape of healthcare costs. For employers, offering competitive benefits while managing costs will be key to retaining talent.

The more transparency that can be brought to healthcare the better. That's why we believe in cost plus pharmacies and direct primary care physicians. Save money, get better care.