Why is your health insurance so expensive
With the recent focus on healthcare in the news, many Americans find themselves wondering what’s causing the cost of healthcare to rise so drastically. While it’s easy enough to point a finger at any one reason, the fact remains that there are a number of factors that have contributed to the rise in healthcare costs across the country.
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Advancements in Technology
10 years ago, employees and employers alike spent about half as much as they do today in healthcare expenses. However, one of the main reasons for this is that the country has seen a number of huge medical advancements in the past decade. These advancements cost money. For example, did you know that a new MRI machine could cost a hospital more than $1 million?
Provider Price Inflation
Health Insurance prices have been left largely unregulated in the U.S. until the recent health care reform. This is because health insurance providers here can negotiate at higher rates by leverage in the market and not by utilization or quality of care. The Centers for Medicare & Medicaid Services report that almost 70% of the increase in national health care spending can be accounted for by price inflation.
Low Use of Primary Care
Did you know that only 38% of Americans these days have a primary care physician? As a result, more people are led to see specialists, which are significantly more expensive. Specifically, Americans spend between three and six times the amount on specialist doctors than other industrialized countries do.
Older and Sicker Population
In addition, healthcare costs are also on the rise as a result of the expanding aging population in America. Baby boomers already comprise more than one fourth of the entire population. Moreover, enrollment in the nation’s already-expensive Medicare system is expected to grow by an average of 1.6 million people per year.
Along with older age, Americans are becoming increasingly prone to chronic health conditions that are more expensive to treat. In fact, almost 50% of the United States population currently suffers from one or more of the following conditions:
- heart disease
These serious health conditions cost the United States healthcare system an additional $1 trillion dollars per year. And with more and more Americans becoming susceptible to chronic conditions, these costs are only expected to rise.
More Instances of Insurance Fraud
Unfortunately, health insurance fraud is suspected to be rampant. It’s estimated that Medicare and Medicaid fraud alone can cost the United States up to $98 billion per year. If instances of fraud become increasingly common, healthcare costs will only continue to rise and be passed onto employers and employees alike.
Overall, there’s no one cause for the rise in healthcare costs. A number of factors have gradually contributed to the rise in healthcare costs and, thus, medical insurance.
This educational graphic on health insurance costs and medical expenses was developed by the medical billing & coding training program at Carrington College. Contact us today to learn more about medical billing and coding as well as other health care career training programs.