Health insurance cost concerns

For five consecutive years, insurance premium rates have risen by at least 9% each year for consumers. This is not an isolated incident - health maintenance organizations (HMOs), preferred provider organizations, and point-of-service plans have all experienced this increase.

As a result, many people have become concerned over the cost of health insurance.

Why do rates increase?
Insurance rates increase for a variety of reasons, depending on the type of insurance. Health insurance increases are often the result of rising cost of prescriptions and an increased amount of people visiting hospitals and having medical procedures done. Rising costs for hospitals and doctors also contribute to health care inflation.

How do rising rates affect consumers and employers?
The ever-increasing cost of health insurance remains the primary reason nearly 50 million Americans are uninsured. Not only are the uninsured affected, but many people who do have health insurance end up cutting back in other areas in order to afford coverage. About 86% of those involved in a recent survey reported having to cut back on savings and other expenses in order to afford health care coverage.

Not having insurance or not having adequate insurance can be another cause of concern when it comes to the financial stability of the household. Nearly 50% of all bankruptcy filings are the result of medical expenses, and nearly a quarter of all housing and credit problems (i.e., not being able to afford the mortgage or having a low credit rating) are the result of having to pay medical bills.

Employers have a number of concerns with rising health care costs as well. The costs associated with health care coverage are the fastest-growing cost factors in the workplace today. In the past six years alone, health insurance premiums for employers have increased 73%. If they continue to rise, the costs associated with health insurance are expected to be more than profits.

How you can alleviate concerns
While policymakers and those with government positions agree that the rising costs of healthcare are out of control, it may be a long time, if ever, before real changes can be seen in the affordability of health care.

Shopping around for a good medical benefits program is one way to cut costs. Take into account the cost of premiums and deductibles when finding a health insurance plan. Insurance agents work on commission, so many of them will be more than willing to help you find a plan that works for you and your family or company. This applies to all aspects of insurance as well, including auto and homeowners. In some cases, discounts in insurance are given if the policyholder has a hybrid vehicle or home security system.

In addition, employers can turn to a health insurance broker, who will assist them in choosing a carrier for their employers, what benefits to offer, and prices they should be paid. Employers can also offer wellness incentives, such as smoking cessation programs and weight loss programs. Encouraging employee health and having healthier employees reduces the number of visits employees make to doctors and hospitals, lowering the insurance costs for all involved.

There are a number of reasons health insurance costs have risen, and they are a cause for concern for many people. When shopping around for insurance, it's important to remember that insurance fraud is a big problem today. Make sure you purchase your plan from a reputable, well-established company.