A global recession looms. Disruptions to supply chains—caused by the COVID-19 pandemic, the climate crisis, and the Russian invasion of Ukraine—have pushed the cost of living up dramatically for millions of people around the world.
Governments have cut back on the social protections communities had come to rely on during the pandemic. As annual inflation rates in high-income countries approach 10%, a growing number of people are being forced to choose between feeding their children and paying their bills.
Stories of families missing meals, wearing winter coats in unheated homes, and living in the dark fearful of escalating energy prices are becoming too common. The cost-of-living crisis has surpassed COVID-19 as the main concern for many communities.
The cost of living is rising, creating new economic uncertainty on the tail end of a very uncertain two years. Experts say the result could be more mental strain, stress and anxiety.
A new KFF analysis finds that, in July, overall prices as measured by the Consumer Price Index were up 8.5 percent compared to the previous July, while prices for medical care increased by 4.8 percent during the same year.
The recent trend reflects the unusually high inflation affecting other parts of the economy, especially gasoline, energy and food. While inflation in those sectors can impact other areas of the economy, they have not yet affected health care prices in a major way.
The result of continuing inflation, then, could be to deepen economic inequality, a problem that existed well before the pandemic, said Lisa Strohschein, a sociologist at the University of Alberta who studies stress, family dynamics and health, including the effects of financial strain.
“Growing economic inequality has been a significant and long-term issue,” Strohschein told Live Science. “And we now live in a world where the pandemic has made some people more wealthy than they already were, but for people who are at the bottom, they have never been more insecure.”
The United States has the most expensive health care system in the world, leading in health care spending per capita. Spending has increased consistently year over year, and is expected to rise over 5% annually for 2019–28. Research shows that “[the cost of] medical goods and services is [also] projected to accelerate, averaging 2.4% per year.”
There are multiple reasons for the continual increase in costs. As is the case with other industries, medical entities must get paid for the services they provide, typically referred to as reimbursement.
Governmental programs such as Medicare and Medicaid account for the largest percentage of health care spending in the United States — approximately 37%. Private health insurers account for an additional 34%.