Brace For Higher Healthcare Costs In 2023

This year, health care costs did not rise as much as other consumer goods and services.  Despite record-high inflation seen in the U.S. this year, healthcare inflation has been about 4%, which is in the normal range of 1-5% seen in recent years.  However, in other areas, prices have soared.  Food prices are 11% higher than last year and gas prices are up 24%. In comparison, what has kept healthcare costs down?     

What is the Consumer Price Index (CPI) and how does it measure inflation?

The Consumer Price Index (CPI) is a measure of how much a typical group of goods and services, often called a “market basket,” costs over time.  It is considered the most reliable indicator of inflation. The current inflation rate for consumer goods is 8.3% based on the Consumer Price Index. 

Why is healthcare inflation lower than other products and services? 

Likely, this lag is because contractual prices for healthcare plans are set in advance, as are contracts between providers and insurers. Once these rates are established, they can’t be changed quickly, unlike items such as gas and food.  However, now that this year’s contracts are coming to an end, prices will most likely increase.

How does inflation affect healthcare for the average person?

It can cause premiums to increase dramatically or create higher costs that may require higher out of pocket payments. Next year, healthcare costs are predicted to increase 

What should consumers do now to prepare for higher costs in 2023?It’s important to understand your health insurance plan thoroughly.  You can also ask your doctor to order generic medicines, 90-day prescriptions, and use in-network providers.  Taking care of health issues through screenings and regular checkups can also prevent larger medical costs down the road.  For other suggestions and ideas, read Eight Ways to Cut Your Healthcare Costs to help you keep healthcare costs down.