It’s no secret that the cost of healthcare is on the rise. Your health insurance premiums are increasing each year and your benefits are probably getting worse! One of the most common questions we get is, “why is healthcare so expensive?”
Wellpoint, the parent company of insurance carriers like Anthem Blue Cross and many others, recently sent out a release to explain where all of your money is going. They do their best to make it clear that the increases you receive each year are not due to insurance company profits, rather the majority of costs are spent towards member services like physician payments, hospital costs, drugs, etc.
Here’s a breakdown that the AHIP (America’s Health Insurance Plans) compiled:
As shown here, only 3% of your healthcare premium dollars are used to turn an insurance company profit. Hopefully that makes you feel a little better to know that while insurance companies are no question turning a profit, that’s not where the majority of their income goes.
The other constant variable that is seen repeatedly is lifestyle choices. For example, people who choose not to exercise and eat unhealthy, are more likely to have heart issues or even diabetes. The cost of their medical care is now increased, compared to the health conscience individual that exercised and watched their diet. Unfortunately, there are many Americans that fall in this category and they’re playing a large role in driving up health care costs.
Of course, there’s no one factor, so if you’d like to have more specific answers, you can check out this study by Wellpoint right here. It will help answer some of the frustrating questions as to why we must pay so much for healthcare.
It’s a topic that is never ending and always evolving. We all want healthcare reform in a way that everyone comes out ahead. While the Obama administration has put a priority on this issue, implementing changes will not happen soon enough. In the meantime, protect yourself, stay insured, find affordable health plans!
