Health Insurance Costs Rise
Consumers can control what they pay for some items while some items are totally out of their control. Health insurance costs are among the items where the customer has very little or no control at all. Yes, it can be controlled to some extent by raising the deductible or changing to a lesser plan. But the consumer is losing in both these instances. The health insurance cost has been increasing at a steady rate for the past couple of years. Why have premiums risen so much? Well, there are numerous reasons for this rise of health insurance premiums. This article speaks about the increases in health insurance costs in the United States.
Mandates Can Increase Health Insurance Costs
One of the major reasons for the increase in health insurance premiums is the government has mandated that every health policy should cover the 10 essential health benefits. This has resulted in insurance companies not operating in a free market system anymore. Since every policy will cover the same items, there is no option for the insurance company to innovate. This means they cannot customize a policy to tailor to the needs of the consumer like in the past. This has made all health policies basically the same. The only variables are the deductible and co-insurance. This happened after the new Obamacare law was enacted by the government. In an Obamacare compliant policy, neither the consumer nor the insurance company have much of a choice.
Even though the new law is far from being perfect, the former system was also not perfect. Under the new law, a single male who is seeking coverage should pay for maternity cover since it is one of the 10 essential benefits of a health policy. But the single male will never utilize this benefit. This is one major reason for the increase in the health insurance costs. There are rumors to say that there is going to be a large increase in health insurance premiums during the next year. Even though a person cannot be turned down due to a previous or existing health condition under the current system, there are flaws in this system too. The former system saw millions of Americans without health insurance due to pre-existing health conditions. As you can see, both systems are not perfect.
Lack of Competition = Rising Prices
The health insurance premiums are suffering today because there is no competition in the industry. Typically, if there is no competition in an industry, the result will usually be a higher price and lowering of quality. The best way to deal with the imminent price hikes is to foster healthy competition between the insurers. Allow them to create customized policies where the consumer is able to pick and choose the best policy to suit their requirements. The company should have a list of broad categories for the consumer to choose from. This will help bring down the health insurance premiums significantly. This is may be the best way out of the precarious situation we are in today with healthcare costs in general.
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