Health insurance is a fickle thing. Every year something changes, prices increase, and no one is quite sure how to explain any of it. Like any other industry, health insurance is impacted by numerous factors that affect costs and policy offerings. If you are wondering why your health insurance rates are increasing year after year, here are a few reasons why.
With the advent of the Affordable Care Act, more people are able to afford insurance premiums year after year. However, this marketplace will still see the price of insurance increase over time. Insurance companies are getting used to this new marketplace as well, and that trial period comes with some adjustments.
You may notice that your insurance premiums have increased, which makes your monthly payments higher when you have to switch or renew your insurance policy. This is caused by a number of factors, including the perceived risk insurance companies face by insuring people and because of the amount of money being spent on health care in general.
Every year, medical companies release new medications, technologies, and methods of conducting healthcare. While this practice can increase the quality of healthcare, it can also destabilize the cost of health insurance for employers and those who benefit from the insurance provided by their employer. When a company is trying to cover health care costs for their employees, they aren’t as able to increase the wages they are paying them.
Prices for medication and medical devices vary. Tried and true medicines and medical devices slowly have their price reduced over time as more and more people use them, have them, and medical professionals can grow more comfortable using these tools.
Developing new treatments or medical devices is often where the expense comes in. A research lab could spend millions researching the effects of a new drug, but making that prescription available to the public could come at a higher price than generic medications do. Likewise, new technologies for surgeries, implants, and other medical devices may be better in the long run, but are more expensive in the short term.
Inflation also takes its toll on the prices of pretty much everything. A dollar doesn’t go as far as it used to, and our insurance rates reflect that. Spending on medication, doctor visits, lab tests, and hospital stays have caused insurance premiums to rise 213% for family coverage health insurance policy offered by an employer. In this same time period, the average wages of Americans have only increased by 60%.
When you are looking for affordable health insurance, make sure you are checking your deductible and out of pocket expenses. This allows you to compare policies that work for you to find the one that is going to give you the best health insurance coverage. By comparing policies, you can look at the policy history and see how much your premiums have increased over time and make sure you are able to set aside enough money to prepare for future health care costs.