Health Insurance Versus Health Care, Who’s The Real Culprit?

Health Insurance Versus Health Care, Who’s The Real Culprit? in Individual Health Insurance

These days, health insurance is the villain. President Obama and many other lawmakers point to the health insurance industry as the common enemy all Americans can coalesce against.

While it’s no lie that health insurance premiums keep going up for everyone, the insurance industry isn’t the real culprit.

It’s health care costs.

After talking with an actuary at one of the largest health insurance companies in the United States, we learned the cost of health care services is one of the biggest drivers of health insurance rates (in the individual health insurance market, an applicant’s health status is the other).

So really when we see studies, such as this one, that show health insurance premiums are going up faster than inflation and wages, it’s not telling the whole story.

Sure, it makes insurance companies look bad, but the only reason insurance premiums are increasing faster than inflation is that the cost of health care services is going up faster than inflation.

Insurance premiums are directly related to the price of doctors’ care. Said even more accurately, health insurance premiums are at the full mercy of the costs of health services.

There are of course a bajillion other factors that go into the health reform effort, but we just wanted to clear up this one thing.

Comments[1]