Why is health insurance so expensive? Author:    Posted under: Health InsuranceHealth Insurance questions answeredHealth Insurance Rates

Have you ever thought to yourself “health insurance is only for the wealthy”? You’re not the only one. In fact, more and more Americans are finding themselves without health coverage these days because of the high cost of health care.

But what, exactly, drives the cost up? There are, in fact, a variety of factors that contribute to costly health insurance.

One category would be the factors that insurance companies take into consideration when evaluating your risk. As with other types of insurance, your health insurance rates are determined by the following:

Your Age. Older people will almost always be charged for a higher health insurance premium than someone considerably younger.

Your Weight. Individuals with weight issue usually are charged with higher insurance rates. Studies have proven that a person’s body proportions are interrelated with his or her health.

Your Family’s Health History. Unfortunately, one’s family health history isn’t something that can be changed. Hereditary diseases such as diabetes, high blood pressure, cardiovascular disease, asthma and cancer are considered when assessing your risk.

Your Location. People who live in urban areas are charged more for health insurance, than those who live in rural areas. The reasoning behind this is that hospital and medical facilities in the cities charge higher rates than those in the country, and obviously insurance companies in urban areas would have to pay more.

Your Lifestyle. Someone who engages in extreme sports such as bungee jumping, skydiving, scuba diving will be charged higher health insurance premiums than someone who likes to read books, watch TV or play board games to pass the time. Likewise, smokers, who are considered to be risking their lives every time they light up, will pay more for health insurance than someone who regularly exercises and watches what they eat.

Your Sex. Research conducted by the National Women’s Law Center has discovered that women have to pay notably more for health insurance than men for the same policies. A healthy 25-year old woman can pay as much as 6 percent to 45 percent more. This is based on the premise that women are more likely to see their doctor more than men especially during their reproductive years. While this is true, men catch up after they reach the 50-year old mark when they are more likely to have chronic problems like heart disease.

Though as the government is revamping the health care industry, a positive change may be seen – Sen. John Kerry of Massachusetts introduced a congressional bill that would forbid insurance companies from imposing higher fees for women more just because they happen to be female.

Pre-existing conditions. Individuals with pre-existing or chronic conditions such as heart disease, emphysema, cancer and even pregnancy are usually charged with higher premiums.

Aside from these, another category would be the outside issues that cause skyrocketing insurance rates.

Defensive medicine. Because doctors are trying to avoid any and all litigation at all costs, mostly at your expense, they often do numerous medically unnecessary diagnostic tests, therapies and procedures. This is so that they will have covered all bases in case legal action is filed against them. And because your insurance has more to cover, expect that those costs will be passed on to you.

Advanced technologies. CT scans, MRIs, x-ray machines, ECGs, ultrasounds – having to undergo lab tests that use these machines will cost you a lot of money. Ironically, pharmaceutical companies invest billions of dollars annually in research and development to create drugs to help treat people pass the cost on to the very consumers they are trying to help – with higher insurance premiums.

Administrative costs. A large portion of U.S. expenditures for health insurance goes to compensation for personnel such as the ones handling claims processing, customer support, sales and marketing, top executives and more.

Insurers would rather pay to treat diseases rather than prevent them. A recent study showed that investing just $10 per person per year in programs that promote better nutrition, exercise and smoking cessation could save $16 billion per year in five years.

Without a doubt, there are varied and deeply rooted reasons for the rising health insurance costs. However, living without health insurance would be ill-advised. Consider the consequences you will have to face when an unforeseen circumstance puts you or a loved one in the hospital without the safety net that insurance provides. The alternative to paying high insurance premiums could be costlier in the end.


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