The costs for employers of providing health care for their companies is rising so fast it's causing some company leaders to throw up their hands and outsource the handling of all the administrative paperwork, and that too is increasing health care costs.
Paperwork and rules compliance has already become a major expense in the health care space, putting it on a growing list of expenses that are fueling faster insurance cost increases.
A survey by the professional services firm Aon says employer health care costs could rise nearly 10% in 2026.
That may sound alarming, but it's not only likely, it's not even a surprise to those who've been watching the industry closely, like Texas Public Policy Foundation's David Balat.
"This 10% that's projected for 2026 is not necessarily new, we've been looking at eight-to-twelve-percent increases for the past several years," he says.
The Aon study chalks up the increased costs based on higher prescription drug prices, increased hospital costs and other factors, but often overlooked is the influence of fast-growing administrative costs.
"Health care finance is complicated, that's why it's important to understand what's related to health care costs and what is related to administrative costs," Balat points out.
Those admin costs increase the overall costs of health care but offer no return in productivity, and complicate the process of budgeting and finance.
"I wish that there was one big problem in health care, because that would be easier to fix, but the problems are multifaceted, which requires a much more complicated solution to address those problems," he said.