The health care landscape continues to evolve in 2024, presenting new challenges for insurers, employers, and employees. One of the most pressing concerns is the projected increase in health care costs, fueled partly by a surge in outpatient procedures observed towards the end of 2023. This spike, attributed to a combination of factors including catch-up care following the disruptions of the COVID-19 pandemic, has raised concerns among patients, insurers, and industry analysts regarding the potential impact on premiums and employer-sponsored health benefits.

The rise in outpatient procedures, particularly noticeable in major US cities where hospitals are struggling to keep pace with demand, is a multifaceted issue with implications for insurers and employers. While some speculate that this surge may be temporary, driven by the timing of non-emergency procedures typically scheduled towards the end of the year when deductibles are met, others warn of a more sustained increase in health care costs driven by broader factors such as medical inflation. There have also been the rollbacks of COVID-era Medicaid eligibility criteria, releasing more people into the wild to find their own health care coverage.

Increased health care costs are not a new problem, but the rates are now hitting levels that are untenable for many companies, especially those with over 150 employees. According to new data from SureCo, benefits consultants say about a third of their clients need an alternative to fully insured plans.