Medical Insurance Blog

Healthcare Cost Explosion Is Caused By Lifestyle Choices

In the previous blog post, we identified how insurance companies in providing medical insurance coverage to insured members use health insurance premiums. In this post we will identify the main drivers of medical costs in the U.S.

 

 

Prescription Drugs

• This year has seen a decline in the number of brand name drugs scheduled to move to generic or over the counter, this means higher prescription costs.
• It is expected this year to see a 21% rise in the cost of specialty drugs. For example cancer drugs or drugs for MS.
• Since 1997 the cost of prescription drugs have grown each year two and a half times faster than the rate of inflation.

The expanding use of technology

• Since 1997 the number of CT scans performed in the U.S has doubled and the number of MRI scans has tripled. This increase is largely due to defensive medicine.

Preventable care:

• Currently nearly 40% of the U.S population is officially obese.
• The obese population spends 77% more on prescription drugs than those of normal weight.
• The rise in obesity has caused the prevalence of diabetes to double in recent years.

America's Demographics

• The number of medical procedures, operations and tests performed each year will continue to rise as the baby boomer generation continues to push through middle age.
• State regulations and mandates imposed on insurance companies drives health insurance premiums up by 22% - 53%.

These causes are just a few of the many causes that are the driving forces behind the cost of healthcare in the U.S. and are at the root of our healthcare crisis. These problems can only be solved with more effective public health and education systems. Our education system must begin to teach the importance of a healthy diet and exercise and our public health system needs to encourage more natural remedies wherever possible. The point is we need to be moving the U.S in the direction of more natural and healthy lifestyles. For too long we have demanded instant gratification, a quick fix to every problem. We see that in fast food, weigh loss drugs, liposuction, drugs to improve sexual performance, drugs to correct high blood pressure which was caused in the first place by a bad diet and a lack of exercise, the list goes on and on and now we are having to deal with the consequences of our decisions.

 

Medical Insurance Cost Trends

The escalating cost of health insurance is a concern for everyone, to solve this problem we need to know what are the major contributors to this problem. In 2007 National healthcare spending reached $2.2 trillion

This is a breakdown of hospital medical services and does not include professional services, which would be additional charges.

• The average cost of a day in a hospital is over $9000
• Care for a burst appendix is over $45,000
• Knee ligament surgery is over $45,000
• A yearly supply of Lipitor is over $1,400
• An average emergency room visit is over $2,000

In 2007, PricewaterhouseCoopers completed a study to ascertain what factors where pushing medical cost up. The study reported that out of every medical insurance premium dollar $0.87 was spent on medical services, drugs, medical equipment and other medical products. Hospitals and doctors combined received more than two thirds of every medical insurance premium dollar.

Out of every premium dollar:

• Doctors received 33%
• Hospitals received 20%
• Outpatient services received 15%
• Prescription drugs cost 14%
• Insurance company's' retained 13% for administration costs, marketing, taxes, compliance and profit
• Other medical services 5%

This clearly indicates that healthcare reform will fail unless the government has more of a focus on reducing healthcare costs, rather than health insurance reform.

Light At The End Of The Tunnel For Healthcare Reform

After months of tough negotiations trying to achieve a healthcare bill that would have the support of the Democrates and Republicans, Sen. Baucus (D-MT) released his bill on Wednesday. The cost of his plan is $856 billion over ten years. The bill includes insurance co-operatives not a government run health insurance plan. Last week a Washington Post-ABC News poll found that public support for healthcare reform increased when a government run option was not included.

Sen. Baucus also included an individual mandate which would require all individuals to purchase health insurance coverage or face a fine. It also includes taxes on high-end health insurance plans, fees which must be paid by insurance companies to help fund the proposed legislation, Medicaid expansions, and government financial help for families who qualify.

The bill would not allow insurance companies to cancel or decline coverage because of a person's medical history. The proposed bill will not add to the national deficit, additionally the Congressional Budget Office reports that the bill will actually reduce the federal deficit by $49 billion.

While there is still a long way to go in the negotiations, this bill does provide a glimmer of light at the end of the tunnel. Republicans have voiced concerns regarding the the cost of the Medicare expansion for each state, the mandate requiring individuals to buy health insurance and the fees being imposed on health insurance companies.

Death Rates In America – The True Cost Of Healthcare

Throughout the healthcare debate, we have heard proponents of the government run healthcare option declare that America is not getting value for its healthcare dollars. The measure they continue to use to argue this point is life expectancy for Americans, stating that life expectancy in the US lags all other developed nations.   But life expectancy is determined by many factors that are completely unrelated to the healthcare system, and when you focus on these other factors you realize that the government's healthcare reform proposals are certainly off target.

First, how is life expectancy calculated?  Very simply, it is the average number of years people live beyond their current age.  Americans at age 65 have a life expectancy of 17 years for males and 20 years for females; this is higher than the life expectancy of 65 year olds in the UK and Germany.  But many factors contribute to life expectancy; it would be ridiculous to think that the healthcare system alone determines this.

Lifestyles and diet are certainly the biggest contributors to life expectancy, and the healthcare reform measures do nothing to address those issues.  In the US, we need to make better lifestyle choices to help ourselves.

Here are some contributing factors that are unrelated to the healthcare system that determine the life expectancy rate in the US:

• Obesity. 40% of Americans are obese; the average among all of the developed nations is 14%, with 3% in Japan, 13% in Germany, 18% in Canada and 21% in France. Obese Americans spend 77% more on drugs than those of normal weight people. They are 20 times more likely to develop diabetes and twice as likely to develop cancer and hypertension. The government run healthcare option will not lower obesity rates in the US.
• Death on our roads. America has one of the highest road mortality rates in the developed world. The death rate in the US is nearly 300% higher than in Japan. 
• Homicide. The homicide rate in the US is 1000% higher than in the UK.

There are many other contributors to life expectancy that are unrelated to healthcare; alcohol consumption and drug usage also have a very big impact. These are all lifestyle choices that certainly inflate our healthcare costs, but a government health insurance option will not solve these problems.

A true test of the quality of care in the US can be found in the survival rates for illnesses.  The Organization for Economic Co-operation and Development compiles data on mortality rates for all of the world's developed nations. The report found that for all cancers, the average mortality rate for all of its member countries was 171 deaths per 100,000 cases.  Canada has a rate of 173, France's rate is 170; the UK's rate is 175; and in the US it is 166.  Further studies found that Americans have a much higher rate of survival for 13 out of the 16 most common cancers, indicating that our quality of care and survival rates are among the best in the developed world.

Obviously, simply comparing life expectancy to healthcare cost is not a meaningful measure.  Our healthcare problems are social problems, and a government run health insurance option will not fix them.  These problems indicate a need for change in our education and public health systems.

Finding Florida Medical Insurance Bargains

 

In a recession like we are presently experiencing, people are tightening their belts in ways they have never thought to before. Most people have traditionally just blindly paid their premiums for their group medical insurance and never really questioned the amount. However, more and more people are discovering that they could be paying significantly less if they opt for private individual or family health insurance. If you meet the right criteria and know the tips for reducing your Florida medical insurance premiums you too can save money on this very necessary expenditure.  

The first thing you must know is that group insurance may be the best thing that could ever happen to you or it may be a big waste of money. If you are perfectly healthy and rarely use your medical insurance, chances are the premiums you are paying for group medical insurance are much higher than they need to be. You are in essence supplementing the health care costs of your less healthy coworkers. However, if you happen to be in the less healthy category, you are getting a bargain, because the premiums are lower than you would pay if you were to have individual insurance. That is, if anyone would even insure you on your own.  

If you are healthy and seeking Florida medical insurance bargains, you will want to begin by looking at the different types of health insurance plans that are available. Your group policy may be a pricey PPO, which allows you to use doctors of your choice both in and out of the provider network. However, a more money-saving policy like a POS with slightly more limitations may be a better choice for you. Another cost-friendly alternative to traditional health insurance is major medical or catastrophic health insurance. Be sure you understand the difference between this type of medical insurance and traditional medical insurance before you opt for it though. 

You will want to give some thought to the deductibles, out-of-pocket limits, co-insurance rate and lifetime limits on your policy. This is the perfect place to save lots of money on your premium. By raising the deductible on your policy, increasing out-of-pocket limits, and adjusting your co-insurance rate so you pay more of the healthcare expenses, you will be able to significantly decrease the premium you pay for Florida medical insurance. Do not lower lifetime limits in order to save money. With the rising cost of healthcare, you need to keep high lifetime limits to fully protect you in case of serious illness or injury. 

By shopping around and comparing prices from different health insurance companies you will also be able to save yourself some money. While most health insurance companies will have similar prices, there are differences between the prices each charge for different policies. Competition exists in insurance as it does in every industry. Therefore, the best way to get the cheapest price is to shop around. Use a free online quote tool to help you find the best price most quickly. Just a few minutes of your time spent answering questions will reward you with multiple quotes from insurance companies offering Florida medical insurance in your part of the state.  
 
Get started today learning all you can about the insurance you already have and the options available to you. Before you know it, you could be saving a nice chunk of cash on your monthly medical insurance premiums.

 

Early Retirement and Arizona Medical Insurance

 

Gone are the days of Florida being every retirees dream. More and more of the baby boomer retirees have discovered and continue to discover the joys of living in Arizona during their retirement years. With a climate unlike any other in the United States, Arizona is becoming the hot spot for retirement. However as early retirees face life outside the corporate world, they are coming to realize that they now have to take care of certain things that were automatically done by the companies they worked for. One of the most important of these is medical insurance. Young retirees are learning that they need to take out private Arizona medical insurance to cover themselves, because they are no longer eligible for the group plans they always belonged to. Yet they are also too young for senior citizen's healthcare plans. What this means is that in addition to all the changes that come with moving, retirees also have to shop for medical insurance.  

If you are in the market for Arizona medical insurance coverage, the ideal way to shop for it is online. Free quote tools for all types of insurance buying are easy to find and use. They provide you with a multitude of quotes from insurers who do business where you live. As with shopping for any type of insurance it is important to compare a variety of companies, their prices and their plans.  

To get started you simply input your zip code into the free online quote tool. It will then ask you several questions that are standard for medical insurance rating purposes. Always respond to the questions honestly so that your quote will be accurate. Making false statements could lead to a policy being sold that is later cancelled and found to be fraudulent. After your personal information is input, the quote tool shares it with specific companies and they provide practically instantaneous quotes.  

The next step is for you to compare the information from the different companies and make a decision about which one works for you. Be sure that the policies you are quoted actually are comparable. Sometime companies have excellent prices, especially when compared with other firms, until you read the fine print and discover limitations and exclusions in the less expensive policies that are covered in the others. Make sure especially that lifetime limits, deductibles and co-payments are similar between all the policies you are comparing, so you can indeed compare apples to apples.  

Do some homework on the companies that quoted your Arizona medical insurance needs. Look into their records of complaints filed by customers. A simple online search can provide this information. If the company received too many complaints relative to their share of the market, you may want to reconsider using that insurer. Check out the insurance ratings the companies have received from independent insurance ratings firms like Standard and Poor's or A.M. Best. An "A" or better indicates good economic stability and good future potential.  

If you are looking for Arizona medical insurance for your post-retirement needs, look no further than the internet. Investigate the options that are offered and make sure that you know exactly what you are getting and from whom.

Presidential Healthcare Reassurances Are Not Enough

 

We are less than reassured with the presidential reassurances on the far-reaching effects of health care reform during his September 9^th talk on the status of healthcare reform. With more than 46.3 million Americans not having health insurance the need for changes is long overdue, but many of those proposed by Obama are not what an already-indebted country needs.  

At one point the President mentioned that there would be no changes required by companies which already had health insurance plans in place. However, that does not mean that a large number of companies will not opt to make changes in their plans anyway. In a tight economy, everyone, including businesses, is looking to cut expenditures. Introducing universal healthcare will make it very easy for many companies to opt to cut health insurance benefits in the quest to save money. This will translate to even more people needing the system the government is planning to offer.  

The President in his speech stated that he would not increase the country's deficit with the implementation of this new plan. The new public healthcare plan is supposed to be self-funded. However, in reality two-thirds of those without health insurance live in poverty. How are those 30 million individuals supposed to pay for a plan when they are struggling to put food on the table and keep a roof over their heads? The money will need to come from somewhere.

While addressing the wild claims of some of the more vocal opponents to universal healthcare, like the possibility of death panels, was beneficial, many of the things refuted left more questions in their wake. Things like the fact that money will not be taken from seniors using Medicare, but that Medicare funding cuts will take place is just plain confusing. 

The use of emotion and nostalgia when President Obama refers to the late Ted Kennedy and his view of the need for universal healthcare was just plain drama. While it may have been a good campaigning tactic, facts speak louder than emotions when it comes to health care changes. 

Those who have lived in countries with universal healthcare are typically the first to denounce it. Private health insurance and healthcare encourages competition, quality and superior customer service.

The Truth Behind Healthcare Insurance System Problems

 

In a recent document by Doctor Kent Holtorf, M.D., it is clearly explained that the problem with the healthcare costs is actually the prices being charged to insurance companies, not the insurance companies themselves.  

Dr. Holtorf explains how originally health insurance was meant to protect individuals from the high cost of healthcare related to serious illness or injury. In short, the ideal use of health insurance is for catastrophic events. However, it is not being used as such. Because the system has changed with time, more and more of the money being paid out is for well-visits, preventative care and testing. These items are costly and are a steady drain on health insurance. Because consumers want the tab picked up for every single healthcare encounter, they are faced with costs that are rising out of control.  

Studies show that if patients wish to pay for healthcare in cash, most providers will accept up to as much as 70% less than the amount they bill the insurance company for. However, most people are not paying in cash, so providers bill medical insurance companies the rising prices and are paid. The difference in price covers the extra staff needed for billing, collections, accounting and records management. It also helps compensate for the wait time before the bill is paid and the risk that the claim will be denied.  

While it is a fact that Americans know their current healthcare system needs help, what exactly that help is remains unclear. One sure thing is that many people realize that the government's current proposal for universal healthcare is not the fix that is needed.  

A solution suggested by Dr. Holtorf is for more and more people to opt for catastrophic or major medical health insurance with a Health Savings Account (HSA) also. Use the HSA to pay for standard medical expenses up front, while relying on the medical insurance for coverage in case of serious need. If more and more people were to adopt this approach, healthcare costs would go down as opposed to going up.  

BestHealthCareRates.com provides an online option for shopping around for catastrophic medical insurance, as well as for other health insurance plans too. Within minutes of getting started, users of their online quote tool have an array of quotes from insurers in their own geographical area to compare and choose from.

Presidential Healthcare Insurance Reassurances Are Not Enough

 

We are less than reassured with the presidential reassurances on the far-reaching effects of health care reform during his September 9^th talk on the status of healthcare reform. With more than 46.3 million Americans not having medical insurance the need for changes is long overdue, but many of those proposed by Obama are not what an already-indebted country needs.  

At one point the President mentioned that there would be no changes required by companies, which already had medical insurance plans in place. However, that does not mean that a large number of companies will not opt to make changes in their plans anyway. In a tight economy, everyone, including businesses, is looking to cut expenditures. Introducing universal healthcare will make it very easy for many companies to opt to cut health insurance benefits in the quest to save money. This will translate to even more people needing the system the government is planning to offer.  

The President in his speech stated that he would not increase the country's deficit with the implementation of this new plan. The new public healthcare plan is supposed to be self-funded. However, in reality two-thirds of those without health insurance live in poverty. How are those 30 million individuals supposed to pay for a plan when they are struggling to put food on the table and keep a roof over their heads? The money will need to come from somewhere.

While addressing the wild claims of some of the more vocal opponents to universal healthcare, like the possibility of death panels, was beneficial, many of the things refuted left more questions in their wake. Things like the fact that money will not be taken from seniors using Medicare, but that Medicare funding cuts will take place is just plain confusing. 

The use of emotion and nostalgia when President Obama refers to the late Ted Kennedy and his view of the need for universal healthcare was just plain drama. While it may have been a good campaigning tactic, facts speak louder than emotions when it comes to health care changes. 

Those who have lived in countries with universal healthcare are typically the first to denounce it. Private medical insurance and healthcare encourages competition, quality and superior customer service.

Indemnity Medical Insurance Maybe The Key To Successful Reform

 

Most Americans would agree that the healthcare sytem is broken and does need to be reformed. Most Americans also agree that they do not want the government to take a larger roll in the delivery of healthcare. People are very doubt the government can deliver on it promises of better quality and access while lowering cost. History has shown us that government health initatives end up costing between 500% and 1000% more than they originally claimed they would.

For instance, Hawaii tried a system with a public option intended to cover more individuals; the program was dropped within seven months as costs spiraled out of control. Other states have had similar experiences.

A major problem with the current medical insurance model is that it does not work for services used on a routine basis. Insurance is designed to work for services that are unexpected and is a very poor and ineffective method of delivery for routine, expected services. With such a system, costs skyrocket and care is poor.

Before HMO's and PPO's we had indeminity insurance. With indemnity plans the insureds would be personally responsible for all medical expenses up to their plans deductible, which was usually $2000 to $ $5000. The fact that people had to cover the deductible each year before the insurance companies began to pay anything, mean't that they shopped medical services. And as insurance companies were not covering the small doctor bills it mean't that premiums were much more stable than they have been over the last 15 years.

Indemnity insurance maybe the solution to our current healthcare crisis, it would certainly make doctors compete for patients, and it would standardize insurance coverage which would make insurance companies compete on the same terms as each other.

Secret Medical Charges And The Bankruptcy of The Healthcare System

 

With summer coming to an end, senators will be heading back to Washington to continue the healthcare reform debate. Hopefully during the summer they have had the opportunity to listen to their constituents views and will take those back to Washington with them.

Escalating healthcare costs have caused health insurance premiums to increase beyond the reach of many families in America, leaving them vulnerable to financial ruin. I would like to see real reform proposals that will actually lower healthcare costs and keep healthcare in the private sector.

One of the main problems has been that people do not have the ability or incentive to shop medical providers, hospitals, doctors, etc. Consumers don't have to be concerned because the medical insurance company is going to pay the bill, therefore medical providers have had a great deal of freedom to charge whatever they want, uninfluenced by market forces.

People are completely unaware of what medical services cost.  Ask anyone who has been a hospital patient if they know the cost of the room and board rate, or the cost for a doctor to visit their bedside while they are confined to the hospital, or the cost of an Advil tablet in the hospital.  Most people will not know the answers to these questions.  But for those that do, they tend to be completely unmoved by the fact that the hospital charges $30 for an Advil, or that the room and board rate is $2500 - $4500 per night.  It seems that people just do not care! Do people realize that these outrageous charges are driving up medical insurance premiums?

In a recent conversation I had with a nurse, she explained that when a nurse administers insulin to a patient at her hospital, she takes one dose from the vile and throws the remaining insulin in the vile away. But...the patient is charged for the entire vile. This is the procedure the nurses are instructed to follow by the hospital.

I called the hospital to ask what a vile of insulin costs.  I spent 90 minutes being switched from one department to another...I spoke with the billing department, the business office, the Vice President of Patient Services, and yet no one was able to tell me who had access to this piece of information.

I became quiet concerned when the conversation turned and I felt as though I was being interrogated by the Vice President of Patient Services...who was asking questions such as "Who are you?" and "Are you a reporter?" and "Why do you want to know?"

Finally, I was told that if I wanted to know the price of any services offered by the hospital, I would have to go the hospital's business office and look in a book that has the list of prices charged for their services. I asked if I could call that office and have someone look up the charge in question.  I was told very emphatically "no"!  When I asked "why not" I was told by the hospital's VP of Patient Services, "because we don't have to, the law does not require that we give this information out over the phone".

Only when hospitals are forced to compete will we be able to control healthcare costs in America. Private health insurance will never be affordable if hospitals, clinics and other medical providers are able to secretly charge whatever they want unhindered by competition.

Why is this problem being ignored by the Obama administration? This problem is costing hundreds of billions of dollars each year and driving up the cost of health insurance. The problem will also not be solved with a government option; that will just mean the problem will be even more hidden from the public. We will see tax increase after tax increase; and a national deficit even further out of control than it is now.