- Health Care, Drugs & Insurance
Five Potential Causes of Higher Health Insurance Costs
Paying for health insurance is a significant financial burden for many families in today’s economy. Of course, that burden can become even heavier when the rates you pay for your medical coverage go up. In some cases, these price jumps are due to situations or events outside your control, while in others they may be caused by factors you can control. Either way, understanding why your health insurance costs may rise can help you properly plan for your financial future.
# 1: Jobs and Hobbies
Being hired for a new job or taking up a new hobby can have an impact on your health insurance costs in some cases. For example, individuals with potentially dangerous careers, like firemen or policemen, may face a surcharge simply due to their increased risk of injury (and therefore, of needing expensive medical treatment).
# 2: Aging
The aging process is one factor that, unfortunately, cannot be controlled, but it will impact your insurance costs nonetheless. The older a person gets, the more likely they are to find themselves needing medical care – and the frequency and complexity of that care will increase as well. There are exceptions to this rule, of course, but as a general principle it holds true. Naturally, insurance companies deal in general principles when setting their rates. For that reason, the older you get, the more likely you are to pay more for your medical coverage.
# 3: Legislation
Regardless of your political persuasions, it cannot be denied that major pieces of legislation like the Affordable Care Act – more commonly known as Obamacare – has significantly raised health insurance costs for many consumers already, and will continue to do so as the massive program is fully implemented. People from different parts of the political spectrum simply disagree on whether this extra cost is justified; that it exists, however, is certain.
# 4: Higher Costs
The costs to insurance companies of paying for treatments are rising significantly – costs which they must pass along to their customers if they are to stay in business. The Journal of the American Medical Association reports that 42 percent of doctors think their patients actually receive more treatment then they should. This excessive treatment likely has a variety of different causes, but one significant one is thought to be the significant increase in frivolous malpractice lawsuits. If doctors are afraid of being sued if a patient does not recover immediately, they are understandably more likely to recommend more treatments – even those that are not strictly necessary – to minimize their liability.
# 5: Economic Trends
Finally, you may have noticed prices for many recurring expenses – not just health insurance – going up over time. In many cases, economic trends like inflation are responsible. Inflation can make the price of most items rise, sometimes substantially, even in the absence of any other factors that might elevate their costs. Inflation’s impact can be particularly noticeable on expenditures like health insurance that take place at regular intervals over the course of many years. The exact rate of inflation can vary depending on economic policies and other external factors, but it is unfortunately a unavoidable part of life for most people.