When people talk about the high cost of health insurance, they seem to not realize the cost of healthcare. Some of the things that really bother me are the high cost of some prescription. About a year ago, I had an issue with my eye.
The doctor prescribed an eye drop that was basically a steroid. He prescribed the generic, but it still cost over $100 for this eye drop. Another one recently was my wife was prescribed Xarelto the retail price at Walgreens is $421 for 10Mg. A similar blood thinner, Coumadin at Walgreens was $150. The drugs are very similar there are pros and cons of both. Coumadin, you often times have to have it monitored monthly. The bigger issue is my wife will only be on it for 30 days as she had a recent surgery. She will not need it monitored. In my opinion, any blood thinner would have worked. Now because she has good insurance she only had to pay the $40 co-pay. The point her insurer pays the rest. If she was going to be on it for a long time say the rest of her life, imagine the cost to the insurance company.
I recently had a shoulder injury. I did not go to a specialist, just my family doctor. There was no X-ray or anything special. I was there probably 15 minutes. The cost was $450. Now I have a high deductible health plan, so I did receive a PPO discount of over $200, but I will still pay more than $200 for the visit.
These are just a few examples of the high cost of healthcare. With a high cost of health care comes higher costs of insurance.
Under the Affordable Care Act, all policies must cover what are called essential benefits. One of them being preventive care without a co-pay. The insurance carrier is still paying for these benefits. The more you make a policy cover again the more it costs. Also, under the law, there is no longer any underwriting. When you insure pre-existing conditions and do not charge more for that, then what is happening is the healthy are paying for the sick. When a company cannot project who is healthy and who is not as there are no underwriting questions, the potential for large financial losses exist. We have seen the nation’s largest carrier, United Health Care stating they have lost $720 million so far and expect that to hit $1 Billion on exchange policies. They have since threatened to leave the Health Insurance Marketplace, and have already withdrawn from three markets. If the largest insurer cannot make it, it seems that the smaller carriers will have even more difficulty. When carriers lose money, they typically need to raise their premium rates to offset the losses.
Again I mention that insurance rates are a derivative of claims. We hear about the insurance carriers being greedy. The not for profit Co-ops created under the affordable care act are failing. Twelve of the original 23 have failed, eight more are expected to fail this year. So it is not the greed of insurance companies, it is the cost of care.
Thanks for reading