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How Credit Unions Can Combat the Rising Costs of Healthcare

August 24, 2020

Doctor holding card that reads, "Rising Costs"

Healthcare costs continue to rise and outpace general inflation rates. In the U.S., we can see this reflected in our total healthcare spending between 1970 and 2018. Americans devoted roughly 6.9% of GDP to healthcare in 1970, compared to 17.7% in 2018. At an individual level, the U.S. has seen a six-fold increase in individual spending since 1970. In 1970, Americans were spending on average around $1,832 (adjusted for inflation) per individual, compared to $11,172 in 2018. These costs have affected consumers the most, as many have seen deductibles for employee-sponsored health plans triple in the last decade alone. Increases to healthcare costs can often lead individuals to delay or refuse care, which can lead to even bigger costs to the healthcare plans in the long run.

Compounding this issue was the arrival of the COVID-19 virus. So far, the unexpected costs of the pandemic have been offset by lower utilization of healthcare by individuals. This trend could continue into 2021, but several factors could lead to further increases in costs. In June 2020, experts at PricewaterhouseCooper (PwC) released their analysis for health cost trends for the rest of 2020 and into 2021. While healthcare utilization has been down due to social distancing restrictions and consumer uncertainty, certain factors have presented two inflators and two deflators to utilization. The possible inflators include new specialty drugs and an increase in mental health services. The possible deflators include the rapid adoption of telehealth and increased adoption of narrow provider networks by employers. While many factors remain unknown at present, healthcare costs will either remain at high levels or increase further.

What can credit unions do today to offset future increases in healthcare costs? Utilizing credit union industry data analytics and working in collaboration with dozens of credit unions, I-Care can help mitigate the ever-increasing annual cost of insurance, allowing your credit union to provide a greater offering of healthcare coverage combined with increased voluntary benefit options for your employees.

We know that managing medical claims of employees is an enormous challenge, especially with the limited amount of claims data that many small to mid-size credit unions receive. Since we collectively work with so many credit unions, I-Care program participants receive more detailed data reporting as a benefit of credit union collaboration. Through the power of enhanced data analytics, your credit union can custom fit your healthcare program to meet the specific needs of your employees and ensure you are not purchasing too much or too little insurance.

Formed by credit unions, for credit unions, I-Care is your collaborative employee healthcare solution, providing better benefits at lower costs. For more information about I-Care, please call us at (414) 433-0174.


Kacik, A. (2019). Rising prices drive estimated 6% medical cost inflation in 2020. Modern Healthcare [online]. From: https://www.modernhealthcare.com/providers/rising-prices-drive-estimated-6-medical-cost-inflation-2020

Kamal, R. McDermott, D, and Cox, C. (2019). How has U.S. spending on healthcare changed over time? Perterson-Kff Health System Tracker [online]. From: https://www.healthsystemtracker.org/chart-collection/u-s-spending-healthcare-changed-time/#item-start

PricewatherhouseCoopers. Medical cost trend: Behind the numbers 2021. June 2020. [online] From: http://www.pwc.com/us/medicalcosttrends