Why Does Insurance Keep Rising?

August 7th, 2012 by Navid J. Leave a reply »

Each year, consumers see their health insurance premiums increase and there are no signs of it getting better anytime soon.  Why do these premiums keep going up and not down?  Why hasn’t the government stepped in and tried to help?  Well the quick answer is that the government passed the health care reform with the exact attempt to make health insurance more affordable for everyone.  The reason premiums increase each year, and why the health reform was passed, is obviously very complex and confusing.  Starting with the health care system, all the way from hospitals to doctors, is very broken and tiered.  Meaning, there are many doctors that are incentivized by different things.

Some want to see as many patients as possible, which obviously lowers quality of care.  And some doctors, only deal with certain markets, providers, carriers, etc. and that leads to other hosts of issues.  The only way that health insurance will become affordable is if people do not game the system.  The major reason health reform might not succeed is that adverse selection might become a big issue.  Since pre-existing conditions will not be an issue starting in 2014 to get approved for health insurance, many fear that the sick will only get health insurance right before a major surgery and then cancel the plan.  This means that the healthy will end up paying for the sick.  This will not make health insurance more affordable.  In fact, it will probably make health insurance more expensive in the years to come.

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