Addressing the Cost of Healthcare: Relief for Today, Solutions for Tomorrow
Key Highlights:
- Numerous trends and dynamics shape healthcare costs, and people experience them most directly through expenses like premiums, copays, and medical bills.
- Elevance Health strives to serve our members by easing those immediate cost pressures and preventing higher costs over time.
- We do this by negotiating lower prices, designing plans around prevention, rewarding high-quality care, and giving members clearer tools and support to navigate their healthcare choices.
Imagine this scenario: Jasmyn, a 46-year-old mother of two and a supply analyst, has health insurance through her employer. When her care provider changed her high blood pressure medication last year, the new prescription worked better, but it cost her more than she expected. She began skipping doses to make it last, and delayed follow-up appointments while juggling work and family responsibilities.
Six months later, Jasmyn was treated in the emergency room for a heart attack. Although her health plan covered most of the hospital stay, her share of the bill far exceeded the cost of the medication she had already been stretching. A short-term financial strain grew into a much greater cost to her health and her family’s financial stability.
Jasmyn’s situation may be a familiar one for many people, and it reflects the layered reality of healthcare costs: People experience them most directly through expenses like premiums, copays, prices for medications, and bills following a procedure, but they’re also shaped by broader trends and dynamics that influence health and healthcare spending. These include whether people have access to preventive care, how care and services are delivered, and the many social factors that affect health.
As a partner in health, it’s our role — and our responsibility — to help manage healthcare costs on both fronts, making it easier for people to get the care they need. To do so, we’re focused on lowering costs, improving health outcomes, and making healthcare easier to navigate.
Lowering Healthcare Costs
Many factors determine overall healthcare costs, including hospital prices, drug costs, and technological advancements. Over the past 25 years, prices for hospital and related services, like nursing home care, have risen more than 250%. Meanwhile, the median net price for new prescription medicines increased by more than 50% between 2022 and 2024.
“These increases influence copays and premiums for the people we serve,” said Morgan Kendrick, executive vice president and president of Elevance Health’s commercial health benefits business. “We work every day to lower costs, so they have a smaller impact on premiums and copays.”
To reduce that impact, we negotiate with drug manufacturers to secure lower prices and with care providers for fair reimbursement rates. Many of our affiliated Medicare Advantage plans offer $0 copays for primary care visits, while our EnsureRx tool helped members in our commercial plans save more than $94 million in just one year on prescriptions.
It’s vital that healthcare dollars are spent on evidence-based procedures and treatments, which helps protect patient safety and ensures the highest-quality care. We use prior authorization to review certain medical services for safe and appropriate use — a process that applies to about 3% to 5% of our claims and one we’re continually working to streamline and simplify.
“We routinely evaluate policies to determine whether they aid a member in accessing the right care at the right time and place,” Kendrick said. “Common procedures like a colonoscopy, for example, can cost significantly less when performed at an optimal site of care.”
To steward healthcare dollars responsibly and help prevent fraud, waste, and abuse, we monitor billing patterns for unusual or suspicious charges, such as billing for services not provided or multiple claims for the same service. Carelon, our healthcare services business, works collaboratively across industries to help identify suspicious activity.
Designing Plans for Better Outcomes
There was a time when health insurance was designed simply to cover basic costs. Elevance Health shifted our approach — building plans that prioritize free preventive care, offer broad care provider networks, and connect members with care managers who help them better understand and navigate their benefits and options.
“By including strategic network design, prevention-focused benefits, and personalized guidance within our affiliated health plans, we’re supporting people in staying healthier for longer, helping them identify conditions earlier and avoiding complications that drive unnecessary costs,” Kendrick said.
We create large, nationwide networks of care providers who commit to patient-centered, data-driven, coordinated care. And we pay those providers for delivering the highest quality care, supporting physicians and hospitals for achieving better outcomes, not more procedures.
Within our affiliated health plans, we use innovative technology to help people actively manage conditions and maintain better health. We achieve cost savings for our members by integrating medical and pharmacy benefits — an approach that shares data and coordinates care between physician, pharmacy and health plan and can help payers and care providers intervene earlier to prevent poor health. This type of connected care has resulted in savings of more than $100 per month for members with complex medical conditions.
Lowering the cost of care also means considering the social factors that lead to better health. Our Community Connected Care program takes a holistic approach to health by linking members to community-based organizations that help them get more nutritious food — which can be especially important for managing conditions like diabetes — or the transportation they need.
By including strategic network design, prevention-focused benefits, and personalized guidance within our affiliated health plans, we’re supporting people in staying healthier for longer, helping them identify conditions earlier and avoiding complications that drive unnecessary costs.”
EVP and President, Elevance Health’s commercial health benefits division
Making Healthcare Easier to Navigate
We advocate for our members by helping them better understand their health plan benefits, their diagnoses, and the choices available to them. From finding high-quality providers to avoiding unnecessary care that can drive up costs, we guide members through a system that often feels overwhelming.
Our digital tools and dedicated care teams work together to coordinate care and personalize each member’s experience. Whether someone is managing a chronic condition at home, visiting a primary care physician, or planning for surgery, we help ensure they have the information and care that meets their needs. Members have 24/7 access to personalized support through the Sydney Health app, live chat, or by phone with a care manager — so they don’t have to navigate alone.
We use data and digital innovation to bring clarity and confidence to important decisions. The Sydney Health app’s Virtual Assistant, supported by artificial intelligence, helps members understand whether a visit or procedure is covered, where they can receive care, and what they can expect to pay. This upfront insight helps members plan ahead and avoid surprise costs.
Our Find Care tool builds on that support by offering price transparency for more than 700 procedures and common office visits, as well as personalized provider matching that makes it easier to quickly locate high-quality, lower-cost care. Find Care has led to a 33% reduction in the use of out-of-network providers and average savings of $185 per member.
“These capabilities reflect our commitment to help members confidently navigate the healthcare system so it works for them,” Kendrick said.
Why It Matters
Together, these efforts show how we’re working to keep costs down today and to prevent higher costs over time.
For someone like Jasmyn, that means fewer moments of hesitation and more confidence in getting the care she needs. Because it’s not just about lower costs — it’s about making care possible in the first place, and supporting people on a path to better health and well-being.
Frequently Asked Question
What are some of the ways health insurance companies help control healthcare costs?
Health insurance companies help control healthcare costs in several ways. They negotiate lower prices with drug manufacturers and fair reimbursement rates with care providers. They monitor billing for fraud, waste, and duplicate claims. They build nationwide provider networks focused on coordinated, data-driven, patient-centered care and reward high-quality outcomes. Insurers also use technology to help people manage health conditions and stay well, while addressing social factors that influence overall health and healthcare costs.