The stock of major health care insurer United Health has dropped from $594 per share in April 2025 to Friday’s close at $237 per share.  That’s about a 60% drop in value in a little over 3 months.  And, from the trends that I’ve been watching and some recent announcements I don’t think that stock drop bodes well for companies that will be paying premiums for employee health care in 2026.

United Health has had some non-revenue issues such as the CEO of one division being stalked, shot, and killed while attending a conference in New York City.  But the major issue is probably not even company related. . . . it is simply the cost and frequency of use of health services in the United States.

Here’s what was written about the company’s Earnings Report last week, “In its second quarter release, UnitedHealth stated that its lower earnings were because healthcare costs were rising faster than insurance pricing. . . . The company also said that it expected the cost and pricing trends to continue for at least the rest of the year. . . “

In other words, the combination of American health care service pricing and the frequency of use of health care by Americans is outpacing the ability to pay claims with the available premium dollars collected.  That’s a big problem for United Health, but also will become a big problem for businesses in America as they will soon be asked to increase their payment to their health care providers for the premiums they pay as an employee benefit.

And, the rise in health costs don’t seem to be ending anytime soon.  Another article on United Health had this comment “. . .  medical cost trends (are) expected to further increase from an estimated sum of 7.5% in 2025 to 10% in 2026”,

Those cost increases won’t just be for United Health clients, Medicare recently gave notice that they believe the annual premium paid by most Medicare recipients is expected to increase 11.6% for 2026 coverage. Still don’t believe me when I say you better look for premium increases?  Here’s another indicator — this article from MarketWatch indicates that those that receive health insurance from the Affordable Care Act (ACA) markets will see a median premium increase of about 15%.

So, as you start to do the work on your 2026 budgets it may be time to make some difficult decisions such as passing more of the cost of benefits on to the employees themselves.  However, as the labor market seems to be tightening up that decision could lead to disenfranchised employees and lead to more problems that you don’t want to be tackling.

In any regard, the sooner you can get health insurance quotes and the earlier you make these budgetary and personnel decisions the better off you will be.

Here’s a recent article from CNN titled “Here’s why you may be spending more on health care next year”.

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  Figuring out the benefits that our funeral home would offer our employees was one of my least favorite activities in operating a business.  I always knew what I would like for benefits but my needs and wants were different from my employees — and most of the team members had differing needs and wants. . . . .Younger employees wanted child care help and older employees preferred full payment of health care costs.

I eventually sat down with each full-time employee and talked to them about what would be their perfect benefit package.  Our business eventually came to a decision that we would offer a “Cafeteria plan” of options with a fixed amount of annual benefit dollars per employee.  That solved my dilemma of being the person that chose our benefit package and let each employee put money to their specific need. . . . .In that package we offered health insurance payments to our group plan, child care payment benefits, additional profit-sharing retirement money, other insurance options such as Aflac supplemental insurance, and some other items.

As to personal thoughts I have some opinions based on my time on the Board of the University of Minnesota where we operated a physicians group and had a partnership with a hospital group for the operation of the University hospital assets.  I will acknowledge that hospital operating costs have low margins but my opinion is simple, we have to find a way to drastically bend the curve of health care costs and utilizations or eventually America will not have the resources for business investment simply because we are putting so much of our economy into “servicing” the health needs of our citizens.

In 2023 the Gross Domestic Product (GDP) of health care services was 17.6% of the economic activity of the United States.  In 1960, the United States GDP percentage for health care services was only 5%.  That low percentage is one reason the 1960’s was a period where “U.S. private investment grew rapidly, especially in the first half of the decade, outpacing the growth rates seen in some later periods. This was fueled, in part, by a 106-month economic expansion, the longest in US history up to that point.”

That Genesis artificial intelligence generated statement ( the above quote) gives some indication to the potential lost “opportunity costs” that the United States is forgoing because we cannot get a handle on our rising health care costs.  It is my hope that this is one of the area’s where articifical intelligence can be harnassed to help with diagnostic issues and treatments knowing a patient’s DNA, medical history, family history, and current vital signs. . . . and do so by bending the cost curve downward.

On the other hand, one cannot look at the increased health care services costs (as a percentage of our GDP) of the past 60 years without acknowledging that life spans in the United States have increased from about 69 years in 1960 to 79 years in 2024.  That’s an extra 10 years of life the average citizen is getting on this planet. . . . .  What cost would one put on that?

However, it is probably time to get your health insurance quotes and make some difficult decisions on your budget for 2026.

Related Article —  “U.S. Life Expectancy 1950-2025  — Trends and influences over the Decades.”  North American Community Hub Stats

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Funeral Director Daily first reported on the “Funeral Coverage Act”, a proposed amendment to the Internal Revenue Code of 1986 to treat distributions from health savings accounts (HSA) for funeral expenses of the account beneficiary as qualified distributions last March.  (You can see that article here).  However, the bill never made its complete movement through Congress last session.

We have recently learned that the bill — HR 2436 — has been re-introduced.  You can follow the progress of the bill as it moves its way through Congress here.

The ultimate result of treating these monies paid to a funeral home from an HSA would be that they could be a tax-free payment for funeral expenses instead of a taxable distribution to the beneficiary(ies) or the estate.

According to the National Funeral Directors Association (NFDA) website:

“Like an IRA account, when a person sets up an HSA, they name a beneficiary. If the beneficiary is a surviving spouse, the unused portion of the decedent’s HSA passes directly to the spouse and becomes his or her HSA; there is no tax liability.

If the beneficiary is not the surviving spouse, the proceeds that pass to the beneficiary are taxed to the beneficiary as ordinary income. However, if the decedent died owing medical expenses, the proceeds in the HSA may be used to pay those medical expenses on a tax-free basis for up to one year after the death.

If no beneficiary is named, the proceeds of the HSA go to the decedent’s estate, and they are taxed as ordinary income on the decedent’s final personal income tax return.”

 

Related Article —  “Health Savings Accounts and Funeral Expenses:  A common sense solution for grieving families”.  NFDA

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  Don’t get me wrong — on a selfish note this bill would be great for funeral homes and for families that might struggle to pay for their death care costs.  It would give families another tool to stop some of them from taking on debt to pay funeral expenses. . . .And, that would be a good thing for those consumers.

However, there is, at least, two sides to every issue.  By allowing a “tax-free” distribution for this purpose, it eliminates the ability of our federal government to “take-in” a form of tax revenue.  And, there is a group that believes that revenue might be better used to pay down the nation’s debt than to give to families — some whom may have other ways to pay for the funeral costs.

Again, don’t get me wrong.  I’m not arguing against passing this bill — but this is how I learned to look at issues when I sat on the Board of Regents for the University of Minnesota.  I always had to look at both sides of the issue.  I learned that even when I had a personal viewpoint one way, voting the other way might be the best way for the University to move forward.  I’m just wondering if that is how members of Congress might see this issue.

So, while I am for this bill.  . I think that there will be challenges passing it moving forward because the net result is that it will add to the deficit and debt.

My Friday morning group:  During my winter in Florida I belong to a Minnesota Friday morning breakfast group.  We meet every Friday morning for breakfast and invite speakers to come to the event.  One of our speakers this winter was Congress member Rep. Michele Fischbach of Minnesota.  She is a member of the Ways and Means Committee and told us that her committee was already having these discussions about what will be in the, as President Trump calls it, “Big Beautiful Tax Cut” bill.  Congress member Fischbach explained the discussions are around exactly what I am talking about  —  “Maxium tax benefits to Americans versus the costs of decreased revenue to the National budget”.

HR 2436 – The “Funeral Coverage Act” was not introduced until March 15 — a period long after Congresswomen Fischbach told us that they were already considering what will be “in” and what will be “out” of the President’s proposed bill.

Related Article — Here’s an article Funeral Director Daily published in 2023 about this HSA/Funeral Cost idea well before it was introduced into Congress.

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