Myriad Genetics to stop developing Alzheimer's drug (Reuters)
As the political campaigns heat up this summer, health insurance is being discussed more and more. When one looks at the health insurance situation in the country, it is easy to see why this has become a significant issue.
All you need to do is take a quick look at some health insurance statistics to get an idea of why it has been moving more and more to center stage as a political issue. Health care has become a major concern of many Americans. The big problem has been the rising cost. Health care costs are rising at a rate of 6.9% which is double the National inflation rate. Almost $2 Trillion dollars was spent in 2005 on health care, which amounts to almost $6,700 per person. It also accounted for 16% of the Gross Domestic Product (GDP).
It is estimated that by 2015, this will double to $4 trillion dollars and will account for as much as 20% of the GDP. How has this impacted health insurance? The health insurance policy is a basic contract between an individual and an Insurance company. The company receives a premium from a large number of individuals and in return pays the health care costs of those who are sick. In short, the idea is that everyone throws in a little bit of money, and the few that get sick are taken care of by the payments of those who remain healthy.
This system peaked in the 20th Century and at one time, health insurance was something available to most people and at a price they could afford. The Insurance companies invested the premiums wisely and they made a profit. The individual had virtually no worries about health care. They were insured and if they became sick, their medical bills would be paid. The cost of this safety net was reasonable. However, when the health care costs began to raise, this balance changed. The Insurance companies needed to make sure they were solvent enough to meet their obligations, and as health care costs went up, health insurance premiums were forced to follow.
Now, health insurance costs to employers are on the rise. The average is 7.7% increase in the cost of providing health coverage to an employer. Smaller companies have seen rates rise 8.8% while the smallest ones, companies with less than 24 employees, have jumped 10.5%. This has meant that more and more of the cost must be borne by the employee. It now is costing an average of $11,500 per year to provide basic coverage to a family of four. Even a single person must put out around $4,200 a year.
The Health Insurance industry has taken much of the flack for this. They have tried to deal with the problems in many creative ways. Exclusions and limited coverage have become the norm. Also, the basic insurance of our parents and grandparents that cast a complete safety net with few restrictions has become a thing of the past. Yet, still Insurance companies get a bad rap when it is really health care costs that are the culprit.
Aazdak Alisimo writes about health insurance for HealthInsuranceCoverageCompanies.com
