As state and federal elected officials examine the root causes of rising health care costs, the spotlight is turning toward how insurance design shapes affordability for the 214 million Americans who rely on private health insurance coverage.
In 2024, U.S. health care spending reached $5.3 trillion, representing 18% of the economy. Retail prescription drugs accounted for 8.8% of that spend, the same as in 2018.
Most insurance benefit structures are not optimally designed to support patients in accessing the care that they need. Instead, patients often face high deductibles and utilization management tools that disrupt care rather than improve outcomes. This is especially problematic for the 129 million Americans living with at least one chronic condition and who account for 90% of U.S. health care spending. Patients with diabetes, autoimmune conditions, cardiovascular disease, cancer and other chronic illnesses depend on consistent treatment, predictable costs and uninterrupted access to medications.
The result is a system that shifts financial risk to the sickest patients who rely most on care. Even modest cost-sharing requirements can accumulate quickly when medications and treatments are ongoing. Research consistently shows that increasing out-of-pocket (OOP) costs can lead to patients increasingly delaying care, skipping doses or abandoning treatment altogether.
According to IQVIA research, as patient OOP costs rise, adherence problems worsen. About 69% of commercially insured patients abandon new prescriptions when cost-sharing exceeds $250, and many others delay doses even at lower out-of-pocket prices. These delays and gaps not only harm health outcomes but also increase overall health care costs.
This matters not only for patient outcomes, but more broadly for the burden of healthcare cost in America.
Treating chronic disease is an area that needs better insurance benefit design and can serve as a basis for improving the overall insurance system: aligning benefits around value, reducing avoidable complications and improving quality of life while lowering long-term spending. Yet current benefit structures often prioritize short-term cost controls over long-term patient-centered solutions.
On January 22, the House Committees on Energy and Commerce and Ways and Means will examine affordability issues for Americans with commercial coverage. Reforms to benefit design should focus on addressing the challenges faced by many Americans living with chronic disease. That means:
- Limiting utilization management practices – such as prior authorization – that disrupt treatment continuity.
- Lowering out-of-pocket costs, removing deductibles on certain medicines and encouraging flat-dollar copays rather than a percentage-based coinsurance.
- Improving transparency so patients understand their coverage.
Health care affordability cannot be solved without a focus on the needs of people living with chronic disease. As spending continues to rise, the question is no longer whether insurance design should change, but whether the system can afford not to.
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