Health insurance costs are far outpacing inflation, leaving more consumers on the hook each year for thousands of dollars in out-of-pocket expenses. At the same time, some insurers are rejecting nearly 1 in 5 claims. That double whammy is leaving Americans paying more for coverage yet sometimes feeling like they’re getting less in return, experts say. 

Frustration over denials and medical costs has fueled an outpouring of vitriol against health insurance companies in the wake of the murder of UnitedHealthcare CEO Brian Thompson. Also last week, a similar outcry led Anthem Blue Cross Blue Shield to reverse a decision to limit anesthesia coverage during surgeries.

The anger may be rooted in fears that unexpected medical costs could prove financially ruinous, as well as concerns that essential care could be denied by an insurer, putting health and well-being at risk even for those who have health insurance. 

Some of those anxieties are well-founded: The top cause of bankruptcy in the U.S. is health care-related debt, underscoring the financial stresses that can stem from high medical costs. 

In fact, most adults say they worry about their ability to pay for health care services or unexpected medical bills, a sentiment shared by people regardless of whether they’re financially comfortable or struggling, a KFF survey found earlier this year. 

In 2024, the average health insurance premium for families carried a price tag of $25,572 per year, while single workers paid an average of $8,951, representing a 6% and 7% increase from the year earlier, KFF data shows. Since 2000, the rise in health insurance premiums has outpaced inflation for all but a handful of years, the health policy research firm found.

“Unhappiness with insurers stems from two things: ‘I’m sick and I’m getting hassled,’ and the second is very much cost — ‘I’m paying more than I used to, and I’m paying more than my wages went up’,” said Rob Andrews, CEO of the Health Transformation Alliance, a cooperative representing major companies such as American Express and Coca-Cola that works on improving health insurance for their employees. “A lot of people think they are getting less” from their insurers, Andrews said.

And while Americans have unhappily encountered other types of inflation in recent years — sky-high grocery prices have been credited with helping President-elect Donald Trump claim victory last month — health insurance can take on an even more personal edge, Thomas pointed out. 

“It’s not like, ‘How much do I have to pay for a lawn chair or a steak,'” Andrews noted. “People are sick or having some sort of health problem they are worried about.”

To be sure, people with employer-sponsored health insurance typically don’t pay the full premium, as their employers pick up much of the tab. 

Yet KFF data shows that employees’ share of their premiums are also on the rise, with a worker with family coverage typically paying premiums of $5,700 per year in 2017, the most recent year for that data, up from about $1,600 in 2000, KFF data shows. The average family deductible — the amount paid out-of-pocket before insurance kicks in — has increased from $2,500 in 2013 to $3,700 in 2023, according to KFF.

About 81% of Americans last year said they were dissatisfied with the cost of health care in the U.S, a 16-year high, Gallup polling found.

“We’ve gotten to a point where health care is so inaccessible and unaffordable, people are justified in their frustrations,” Dr. Céline Gounder, CBS News medical contributor and editor-at-large for public health at KFF Health News, told CBS Mornings on Friday.

Health insurance denials

Aside from rising health insurance costs, Americans are also expressing anger at coverage denials, which a KFF analysis of nongroup qualified health plans in 2021 found impacted almost 1 in 5 claims. However, their study found denial rates varied considerably by insurer, with some as low as 2% while others were as high as 49%. 

“When you are paying for something, and then they don’t give it to you and they keep raising prices, of course you will be frustrated by that,” noted Holden Karau, a software engineer who created a free service called Fight Health Insurance to help people appeal their denials. 

Karau says she came up with the app, which uses AI to craft appeal letters, after her own and her dog’s experience with insurance. Her pet insurer initially refused to pay for anesthesia for her dog’s root canal, while Karau, who is transgender, said she dealt with many appeals to get her own procedures and surgeries covered by her insurance. 

More insurance companies are using AI to review claims and issue denials, which isn’t always obvious to consumers. The shift to AI-based reviews has sparked lawsuits against insurers, with UnitedHealthcare sued last year by the families of two now-deceased customers who alleged the insurer knowingly used a faulty algorithm to deny elderly patients coverage for extended care deemed necessary by their doctors.

“With AI tools on the insurance side, they have very little negative consequences for denying procedures,” Karau added. “We are seeing really high denial rates triggered by AI. And on the patient and provider side, they don’t have the tools to fight back.”

Most people may not be aware that they have the right to appeal a denial, Karau noted. The majority of people who are hit with a denial or billing errors don’t contest, a study found earlier this year. For those that do, a first appeal will be dealt with by the insurer, but if that in-house appeal is also denied, you have the right to ask for an independent reviewer to look at your claim, according to the National Association of Insurance Commissioners.

“There are multiple levels of appeal, and in my experience, I would say it’s important to appeal until you at least get to an independent reviewer,” Karau said. “If you don’t appeal, you won’t get the care you need.”

Man’s family awarded millions in lawsuit over Hennepin County jail death, and more headlines

MINNEAPOLIS — Minnesota-based UnitedHealth Group Inc. is the focus of an antitrust lawsuit filed on Tuesday by the United States Department of Justice.

A UnitedHealth spokesperson confirmed with WCCO that the suit involves the health insurance giant’s proposed $3.3 billion acquisition of Louisiana-based Amedisys Inc., one of the country’s biggest home health and hospice care providers.

Bloomberg News reports the suit was filed days after a meeting last weekend between the justice department and heads of both health care companies failed to quell concerns of possible antitrust issues, despite the companies’ joint offer to sell off 100-plus clinics to a Texas-based competitor.

The justice department believes the acquisition could “lead to higher prices in home health care in regions where Amedisys is a main competitor” to LHC Group, Bloomberg reports, a business UnitedHealth purchased in 2023. Both companies operate in many of the same states, especially in the South.

This isn’t the first time the justice department has had UnitedHealth in its legal crosshairs. Just two years ago, it unsuccessfully sued the company amid its purchase of Change Healthcare, the IT firm targeted in the cyberattack in February that reportedly cost UnitedHealth $872 million due to a lack of multifactor authentication. UnitedHealth paid a Bitcoin ransom valued at $22 million.

Amedisys’ stock value dropped on Tuesday following news of the upcoming suit. A UnitedHealth spokesperson gave this statement to WCCO on Tuesday:

“The Amedisys combination with [subsidiary company] Optum would be pro-competitive and further innovation, leading to improved patient outcomes and greater access to quality care. We will vigorously defend against the DOJ’s overreaching interpretation of the antitrust laws.”

More than 47 million Americans get their health insurance from UnitedHealth.

Stephen Swanson

Stephen Swanson is a web producer at CBS Minnesota. A 21-year WCCO-TV veteran, Stephen was a floor director for a decade before moving to the newsroom, where he focuses on general assignment reporting.

Federal regulators are accusing the country’s three largest pharmacy benefit managers of illegally driving up the cost of insulin in the U.S., while making it harder for patients to obtain cheaper versions of the life-saving drug. 

The companies — CVS-owned Caremark Rx, Cigna Group’s Express Scripts and UnitedHealth Group’s Optum Rx — acted in ways that stifled industry competition for insulin drugs, including by using unfair rebating practices, the Federal Trade Commission said Friday.

That artificially raised the list price of insulin, creating what the agency characterized as a “drug rebate system that prioritizes high rebates” from drugmakers, the FTC alleged in announcing lawsuits against the three businesses and their affiliates. 

Pharmacy benefit managers, known as PBMs, manage prescription drug plans for health insurance programs, including Medicare, and serve as intermediaries with pharmacies, employers and drugmakers. Caremark, Express Scripts and Optum together administer roughly 80% of all prescriptions in the U.S., according to the FTC.

“Millions of Americans with diabetes need insulin to survive, yet for many of these vulnerable patients, their insulin drug costs have skyrocketed over the past decade thanks in part to powerful PBMs and their greed,” Rahul Rao, deputy director of the FTC’s Bureau of Competition, said in a statement. “Caremark, ESI, and Optum — as medication gatekeepers — have extracted millions of dollars off the backs of patients who need life-saving medications.”

Patient advocates, lawmakers and other critics have long accused PBMs of driving up drug costs, though the companies say they help control health care expenses and pass along savings to their clients.

CVS Caremark and Optum disputed the FTC’s allegations.

“CVS Caremark is proud of the work we have done to make insulin more affordable for all Americans with diabetes. To suggest anything else, as the FTC did today, is simply wrong,” the company said in a statement to CBS News. 

A CVS spokesperson also said the company has a record of protecting patients from rising prescription drug prices and that it has “led the way in driving down the cost of insulin for all patients.” 

CVS members on average pay less than $25 for insulin, according the company, which added that it negotiates deep discounts for its clients.

Optum called the FTC’s claims “baseless.”

“For many years, Optum Rx has aggressively and successfully negotiated with drug manufacturers and taken additional actions to lower prescription insulin costs for our health plan customers and their members, who now pay an average of less than $18 per month for insulin,” the company said in a statement to CBS News. 

Express Scripts said the FTC has chosen “to ignore the facts and score political points, rather than focus on its duty to protect consumers.”

Far higher costs in U.S.

Insulin costs have skyrocketed in the U.S. over the past two decades, putting the cost of care out of reach for many Americans. some of whom are forced to ration the drug or skip treatment. 

Adjusted for inflation, between 2017 and 2022 the cost of insulin in the U.S. rose 24%, according to the American Diabetes Association. But the gross price of insulin is more than 900% higher on average in the U.S., compared with the cost in 33 developed economies around the world, according to a February RAND report. 

Even after factoring in discounts from drugmakers, the cost of insulin in the U.S. was more than double that in comparable countries, the nonprofit think tank found. 

“Insulin prices in the United States have been increasing for many years and are substantially higher than in other middle- and high-income nations,” Andrew Mulcahy, the study’s lead author and a senior health economist at RAND, said in the report.

—The Associated Press contributed to this report