Before we get into the actual issues with health insurance, let’s be reminded of what the Affordable Care Act, also known as Obamacare, fixed:
- No more lifetime caps on medical coverage;
- No more being denied coverage because of preexisting conditions;
- Children can stay on their parent’s health insurance until the age of 26, and
- In every plan, 10 important benefits have to be covered in some way.
People see premiums rise and blame the closest entity without investigating the reason as to the actual issue behind their complaints.
What Is Actually Behind Those Rising Premium Costs?
At the end of the year, things get evaluated. Each insurance company sits down and creates typical “people profiles,” where they outline basic needs for every “type” of person they might cover. These profiles range from male infants from age 2 to 6, to females aged 65 to 75. These outlines detail things like how many vaccinations the infant will need, how many annual doctor visits a smoker will need, and the mammogram appointments a female will require.
Also taken into consideration are average rates of specific surgeries (such as appendectomies and broken bones) and tests that will be routinely needed to check things like cholesterol and insulin levels, as well as standard blood tests.
Then, those profiles are added up, divided by the number of patients any one insurance company plans to insure across the nation, then “excess costs” are added back to the individual profiles. After all, a 50-year old male won’t need a mammogram, but he will most certainly need a colonoscopy.
After all of that is done, the totals are re-added per group, divided yet again, and that becomes the average cost per patient, also known as the annual premium.
It’s a convoluted process, but at the moment it’s the fairest it will get. For those that stay healthy and only need one doctor’s visit a year, it seems like a rip-off. For those with chronic health conditions who need multiple medications on a monthly basis, it’s a relief dream.
But There Are More Factors
In order to pinpoint why insurance premiums go up, we have to look at the population as a whole, because that is what the insurance companies do when finding their averages: the population of the United States is currently aging, and that means greater medical costs to keep them healthy. And it’s true that more children are born every day, but there is also a higher percentage of children being born with autism and other issues, which also contributes to greater demand in healthcare needs.
This means more medicinal requirements for the country, more doctor visits for the country, and more required therapeutic visits for the country.
An annual premium isn’t based on an insurance company’s average… It is based on a national average.
But, There’s A Catch-22
Because of those rising costs, people can’t afford to purchase health insurance. When people can’t afford to purchase health insurance, the number that the insurance company uses to divide out premiums with their “people profiles” is lower than their usual number, making annual premiums higher as well.
The Simple Answer Is This
Healthcare costs rise because medical costs rise. However, those medical costs aren’t just the costs of paying doctors. It’s the higher cost that comes with greater demands for medicine, an increase in overall doctor’s visits, an increase in medication necessary (as well as supplies are required for tests), and a higher demand for specialist’s visits.
Obamacare isn’t the reason health insurance premiums are rising.
Our necessary medical interventions that are escalating on a yearly basis are the cause of rising premiums. Obamacare is simply increasing their prices as the insurance companies increase their prices in order to accommodate the strain that is being put on them because of a higher demand for overall medicine.
Want the demand for medicine to not affect the price? Then medicine will have to be made cheaper.
So, if you want to be outraged at something, be outraged at this.
Featured image courtesy of YouTube video.