Why Are Health Premiums Rising?

Frustrated by rising health insurance costs? You're not alone. Millions of Americans are feeling the pinch of skyrocketing premiums. What are the reasons behind the increases, and what can the average worker do to alleviate costs?

To answer these questions, you need to look at the reasons behind rising health insurance premiums and other costs. It's not a simple picture--rather, many factors contribute to your monthly bill.

The business of health insurance evolves with the population. As baby boomers age, their need for health care grows. Increased consumer demand means more expensive prescriptions, a higher demand on expensive technology, and higher prices overall. Hospital care and physician services are seeing the biggest increases, and all the higher prices trickle down to your rising health insurance premium.

Some employers are beginning to respond to cost increases, adding flexibility on optional services like dental and vision plans and considering lifestyle choices like smoking. If you're looking for your own discount insurance policy, however, you need to consider the bigger picture of the growing health care industry.

As the health care industry grows, trends shift toward consolidation. This means that instead of having a wide range of smaller insurance policies to choose from, you may be stuck with just a few large companies offering a range of plans. Broader managed care networks hinder your ability to shop smart for quotes, which leads to a potentially higher policy.

Labor pressures, growing pharmaceutical expenses, and higher costs in nursing home and home health care facilities also contribute to rising premiums. Rising health care costs affect both private and public sectors--at first glance it seems that the cheap health insurance policy is outdated.

The good news? Discount insurance plans aren't all gone. In fact, you may be able to find a cheap health insurance policy in a single afternoon. Collect free quotes and compare the plans based on premiums, prescription plans, co-pays, and deductibles. Discount plans are available for singles, married couples, and families.

When you personalize a health insurance policy to fit your needs, you may be surprised at how much money you can save, even in this climate of rising health insurance costs.

A growing number of colleges and universities now decline enrollment for students who cannot provide proof of current health insurance. Such policies protect schools from lawsuits filed by families of other students who become ill when exposed to an untreated, uninsured classmate. For working adults attending career training programs, this requirement can delay completion of degree or certification programs necessary for career advancement.

In 2005, Harvard researchers discovered that medical bills caused more bankruptcies than other debts. Over two million Americans claim bankruptcy every year because of unpaid hospital expenses. Under stringent bankruptcy laws, an illness or injury can cause financial strain on a family for ten years, if not longer. A discount insurance plan that covers only catastrophic illness or injury can be enough to protect your family against financial ruin.


About the Author
Amelia Gray is a freelance writer in Austin, TX. Amelia earned a bachelor's degree in English Literature from Arizona State University and an MFA from Texas State University.

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