Washington's rising healthcare costs outpaced inflation, report shows

Health insurance illustration (CC BY-SA 3.0)

New data from Washington’s insurance commissioner finds that health care costs across the state rose 13% between 2016-2019.

The Office of the Insurance Commissioner (OIC) published an analysis in December, which shows that health care costs far outpaced inflation.

"For years, we’ve seen the cost of health care grow, especially with advances in technology and prescription drugs," said insurance commissioner Mike Kreidler. "These increases have impacted how much people pay for their health insurance. We need to get a handle on what’s driving costs if we want to address the issue and help lower health insurance premiums. This report helps us take a much closer look at what’s behind health care cost increases and understand whether it’s the use of health care services or their price that is contributing more to the growth in costs."

Kreidler says his analysis focused on how much health care was used and the price of each claim.

According to the data, the most significant cost drivers were pharmacy, acute inpatient care, outpatient emergency and non-emergency care, and ambulance transportation.

(Office of the Insurance Commissioner)

In 2016, total medical and pharmacy spending per member was $373 per month; just three years later in 2019, spending reached $422. During that time, medical costs went up 11.5% and prescription drug prices climbed 19.2%.

Acute inpatient discharges also declined across the board, but prices continued to increase. Costs rose for maternity, medical care, surgery and behavioral health – but behavioral health saw a 31.8% cost increase, going from $14,842 in 2016 to $19,562 in 2019.

(Office of the Insurance Commissioner)

Kreidler says these rising costs have outpaced inflation. The consumer price index, which measures the average costs for goods and services, increased by 7% between 2016-2019.

The OIC will release more data in the coming months, looking into the rising costs of prescription drugs, mental health, hospitals and ambulances.

"Washington state has been hugely successful at improving access to health insurance for people who need coverage, and it’s something I’m very proud of," said Kreidler. "But now we need to seriously tackle affordability. Understanding what’s behind the often paralyzing costs is the first step toward a solution."

You can find the full chart of healthcare costs on the OIC website.

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