Health insurance rates increase because the underlying cost of health care services increases every year and our population's average consumption of health care services has been increasing for many years. If the cost of gasoline steadily rises and at the same time you are driving more miles each year then you understand it costs you more to operate your car. Health care services are the gasoline and using more health care per person is the increased miles driven part of the analogy above.
That addresses the basic economic factors that have been happening for decades. Now add to those the impacts of the Affordable Care Act (ObamaCare) and you have a whole new set of cost drivers being added to the equation. For example, ObamaCare does add taxes and fees to insurance plan costs and medical devices - these costs are passed on to the consumer. The law mandates that a wide range of preventive health care services must be covered at 100%, all policies must cover maternity (many individual policies didn't), no medical underwriting is allowed, polices must be guaranteed to be issued and pre-existing conditions must be covered immediately, and these are just some highpoints of the coverage changes now required. While all of these requirements may sound good, and they do benefit many people, there is no way around the fact that such changes will increase health care consumption even further. More demand for a finite resource equals higher costs.
An aging American population is also a driver of increased health care consumption and, with the Baby Boom generation entering their retirement years, will be for years to come.
This gives you a general outline of why your health insurance rates have been increasing and will continue to be increasing for the foreseeable future. As I described above, our nation has many structural issues that drive health insurance rates higher. Despite its name, the Affordable Care Act serves mainly to expand access to health insurance and health care but does very little to address any of the underlying factors that lead to higher health insurance rates.
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That addresses the basic economic factors that have been happening for decades. Now add to those the impacts of the Affordable Care Act (ObamaCare) and you have a whole new set of cost drivers being added to the equation. For example, ObamaCare does add taxes and fees to insurance plan costs and medical devices - these costs are passed on to the consumer. The law mandates that a wide range of preventive health care services must be covered at 100%, all policies must cover maternity (many individual policies didn't), no medical underwriting is allowed, polices must be guaranteed to be issued and pre-existing conditions must be covered immediately, and these are just some highpoints of the coverage changes now required. While all of these requirements may sound good, and they do benefit many people, there is no way around the fact that such changes will increase health care consumption even further. More demand for a finite resource equals higher costs.
An aging American population is also a driver of increased health care consumption and, with the Baby Boom generation entering their retirement years, will be for years to come.
This gives you a general outline of why your health insurance rates have been increasing and will continue to be increasing for the foreseeable future. As I described above, our nation has many structural issues that drive health insurance rates higher. Despite its name, the Affordable Care Act serves mainly to expand access to health insurance and health care but does very little to address any of the underlying factors that lead to higher health insurance rates.