How can we limit insurance premium increases?

Question

One of the biggest reasons that so many Americans are either losing coverage, paying more for, or going without, healthcare coverage is because of the rising cost of healthcare insurance.

At this time, over 40% of Americans go without healthcare coverage and many more are paying more and more each day.

What can be done to reduce the amount that is charged for premiums?

Faye, as a former benefits administrator, I am not blaming this solely on the insurance companies, but I do know that they increase premiums at a rate faster than inflation and also are continuing to show record profits.

MBRcats, while there may be some people who CHOOSE not to have health insurance, I know MANY people who cannot afford to pay the premiums for healthcare insurance. My last employer made the employees pay well over $270 per week for healthcare coverage with a large deductible and copay. So, sorry to burst your theory, but we CHOOSE not to get healthcare when we cannot afford the premiums.

Answer 1

Currently, with over 300 million Americans, the number of uninsureds in nowhere near 40%. The number is around 45-47 million people. this equates to about 17%.

There are many things that contribute to the increasing cost of health insurance. Yes, medical malpractice insurance costs greatly contributes to this, but it is not the only factor. Our over-utilization of insurance is probably the biggest factor. We expect health insurance to pay for every little expense. This is a result of the rich benefits plans of the 80's and 90's, where managed care paid for all but $10 of every medical expense.

I am an advocate of High Deductible Health Plans. I sell them every day. If you are willing to "self-insure" for a portion of your medical expenses, you can expect that your premium will be lower and your increases will be slower.

Here's an example: I have a group with a $10 PPO plan that is looking at a HDHP. They are currently paying $23K per month in premium for 14 people. The premium for the HDHP is $8500 per month. The savings will be partially used to fund a portion of the deductible, using a Health Reimbursement Arrangement, whereby the employer will reimburse the employee for a percentage of every medical expense until the deductible is met.

The annual premium increases on these types of plans have typically been less than half of those of traditional co-pay plans. My clients are using these strategies to control their costs year over year.

Answer 2

A huge part of the problem is malpractice insurance premiums. These premiums are driven by malpractice suits. The doctors have to pay very high premiums even if they have never been sued. Two factors in the premium is the TYPE of doctor & what procedures they do. The premiums are MANY thousands of dollars per year. This is one thing that drives the cost of healthcare. Another is drug costs. While there are some not so great doctors out there & there are mistakes, many suits are unfounded or caused by the patient's own errors. This is driven in many cases by attorneys. Most attorneys are good & honest but there are a few out there (we have them in every area & I'm sure you know who they are) that will sue everyone for anything.

Answer 3

This is NOT correct information. Health insurance companies are CERTAINLY not showing record profits, and 40% of AMERICANS are not going without health insurance. About 20% of the people in the US are uninsured, and HALF of them are illegal aliens. Half of the remainder are uninsured BY CHOICE, being mostly healthy young adults, who do not feel they are "at risk" for high medical bills.

The MAIN reason for the rising cost of healthcare, is the RISING AMOUNTS BEING SPENT ON HEALTHCARE. Want to limit premium increases? Then you have to limit payouts. What's your favorite way of doing that? Limit payout to a lifetime $100,000 per person? Cut off the elderly from services? Stop paying for anything related to smoking and obesity?

If you really think insurance companies are making massive profits, put your money where your mouth is - and buy stock in them. Personally, you couldn't PAY me to invest in insurance companies, because I think the profit margins are too slim.

Answer 4

Reduce the amount that is charged by hospitals and doctors. That would be a start.

You're asking insurance companies to lower their premiums but you don't mention that they are going to have to continue paying out the same amount in medical costs with less money to do so.

Have you looked at hospital costs lately? My son was in the hospital for 12 days and the bill was $50,000. He hadn't paid anywhere near that amount in insurance premiums so in his case, the insurance company lost a ton of money on him.

There is way more that goes into why so many Americans go without insurance than the price of an insurance policy. You are blaming the entire problem on insurance companies. What if all the insurance companies decided to stop selling medical coverage and just let everyone be responsible for their own medical bills?

That would be an interesting problem wouldn't it? Your available medical care would be minimal if your doctor suddenly thought he wasn't going to get paid the big bucks from the insurance company but had to rely on you for payment.

Additional note based on your comment to me: Insurance companies do not raise their premiums based on the inflation rate. They raise them based on actuarial factors and I won't even pretend to know how an Actuary figures that out but if you go look at the average cost of a hospital stay in a city like San Francisco then look at the cost of a hospital stay in someplace like Kansas City, you'll find that SF is a whole lot higher so people in SF are going to pay a much higher price for medical insurance. If people would stop running to the doctor every time they have a hang nail and expect the insurance to cover the cost of the doctors visit for everything, costs would go down. That doctor is going to run a battery of hang nail tests just because he doesn't want a malpractice lawsuit and that is, in part, the problem. Costs have gone up because we live in an entitlement society where everyone thinks they should get everything paid for. Get some higher deductibles on the policy and the usage for stupid stuff would go down.

Answer 5

Tort reform. Contact your congressman.

Answer 6

Healthier people.