Cost Of Health Insurance Will Continue To Rise

In January of 2008 about half of all the workers in the United States were covered by employer-paid health insurance. That figure has fallen to about 44%. Some believe the drop has been due to the large number of people that have lost their jobs due to the recession. I don't think so. That might be partially true, but most of the millions of jobs that were lost were already gone or going by 2008 (and the number of people on government insurance has only grown by 3% -- about half as much). This makes me think there are more people with jobs that have lost their insurance (or didn't get an insurance benefit when they luckily found a new job).

The sad truth is that the cost of private insurance is skyrocketing. Many individuals were already priced out of the health insurance market, and now many companies, especially small companies, are being priced out of the market -- to the point where they can no longer afford to offer their employees insurance coverage (or employees can no longer afford to pay their rising share of the cost).

The fact is that health care premiums have more than doubled just in the last decade, and they are rising even faster now. It's not unusual for a company to find their premiums are increasing at least 20% ( and for some companies that rise is as much as 43%). With premium hikes like that it will double again in less than five years.

The Republicans are blaming these ridiculous jumps in premium costs on the new health care law. The private insurance companies are blaming them on rising medical costs. The truth is that neither of these (or both of them together) can legitimately account for the exorbitant rises in private insurance premiums. But greed can. These companies that are claiming they have to raise premiums by so much are already making record-breaking profits, and they'd like to make even more. And there's nothing to prevent them from doing that.

The new health care reform law was supposed to drive the cost of health insurance down. It was supposed to do that by:

1. Making insurers publicly justify rate increases. Is there anyone out there that thinks insurance companies can't justify any increase they want -- even if they have to fudge the numbers to do it? And even if they can't or don't justify the raises, they can't really be stopped from carrying through with them.

2. Making insurance companies pay 80% of premiums for patient health care. I'm not sure just how this is supposed to reduce premiums. It is much more likely to increase them, so the companies can keep their huge profit margin.

3. Create state insurance exchanges when consumers and small companies can supposedly pool their resources to buy insurance. The idea here is that competition will bring prices down. Republicans have clung to that idea for a long time now, and evidently Democratic politicians are now buying into it. The problem is that it simply doesn't work -- not for a product that everyone needs, either now or later. The companies don't have to meet in some back room to collude -- a wink and a nod will do. Why should they lower their premiums (and therefore their profits) when none of their competitors are doing so. They have a captive market and they can sell their product no matter how expensive they make it.

The fact is that while we still do not cover all citizens with health care in this country, we pay twice as much for health care as the countries that do cover all their citizens (like Canada and the European nations). While the new health care reform law did do a few good things -- like getting rid of pre-existing conditions and allowing children to stay on their parents insurance a few years longer. But it did nothing to really drive down the cost of health insurance (or health care).

There was a chance to do something that would have put a downward pressure on insurance costs -- to create a public option for health insurance (like Medicare for anyone who wants it). But the politicians didn't have the political courage to create one. That would have eliminated the profit and reduced the overhead resulting in lower insurance costs, and the private insurance companies would be forced to cut their overhead and profit margins to compete with it.

The private company health insurance premiums are going to continue to rise because there's nothing to prevent it. And the more they rise, the fewer companies will be able to continue to provide that coverage for their employees -- and more consumers will find themselves priced out of the market, even the new state health exchanges.

Eventually this country will have to go to some kind of public insurance -- hopefully a government single-payer system that leaves hospitals and doctors as independent businesses (like Canada). There really is no other option. But thanks to the recently-passed health care reform law, it's going to be many more years before the country realizes that.