Rising Health Insurance Premiums: A Complex Issue
Yes, insurance companies certainly play a role in the rising premiums this year, but hospitals and doctors share part of the blame too.
People purchasing health insurance through the Obamacare marketplace can expect steep price increases in the coming year. This increase is largely due to cuts in federal contributions toward insurance premiums. But what exactly is driving these premiums up in the first place? NPR health policy correspondent Serena Simmons Duffin sheds light on the situation.
According to Duffin, there are striking stories about the premium prices people are facing. For instance, why does a 64-year-old man in West Virginia have to pay around $2,000 monthly for an Affordable Care Act plan? Cynthia Cox from the nonpartisan health research organization KFF offers a straightforward answer.
Cox explains, “Obamacare premiums are high because health insurance premiums in America are high.” She notes that, interestingly, these premiums are quite comparable to those of employer-sponsored health plans. However, the latter often don’t require workers to foot the entire bill. While it’s true that premiums were lower before the Affordable Care Act, at that time, individuals with pre-existing conditions struggled to find coverage, and the plans available often lacked comprehensive benefits.
For instance, many health insurance plans didn’t cover things like pregnancy or prescription medications. Now, more people and services are included under health insurance umbrellas, but it still costs a lot, often appearing much steeper than what folks in other nations pay.
Cox also addresses a misconception: many believe that health insurance profits inflate healthcare costs. Surprisingly, Americans actually spend more on health insurance compared to other countries, primarily because of the elevated fees charged by hospitals and doctors.
The cost to visit a hospital or doctor is significantly higher in the U.S., and even the same prescription can be more expensive here. However, Americans are not visiting doctors or staying in hospitals for longer periods than individuals in similarly affluent countries.
Cox mentions, “We actually have slightly fewer doctor visits and somewhat shorter hospital stays.” The crux of the issue lies in the higher prices for the care provided.
Over the last few years, the 24 million people who buy their own insurance have been shielded from some of these costs, thanks to a system where small business owners, farmers, and ranchers could get comprehensive coverage while only paying a portion of the premiums, with the taxpayers making up the difference. This setup resembles how employees at larger companies share their premium costs. Now, though, those federal funds are declining unless Congress can reach a bipartisan solution in the near future. Individuals have until December 15 to select a plan for the upcoming year while lawmakers are currently away for the Thanksgiving holiday. Serena Simmons Duffin, NPR News, Washington.
