Paying More For The Same Flawed Healthcare Insurance

Chances are, you are paying more for your health insurance this year than last year. You may well wonder, why is insurance so expensive? The size and complexity of the U.S. healthcare delivery system is an important part of the problem.

Problems with Healthcare in the US

The Covid-19 pandemic has made yet more obvious the many problems with healthcare delivery in the United States. There is very little central coordination of information about patients. Different providers – we have thousands of them – can have trouble making sure they are dealing with the same patient, much less coordinating care for them.

Health Insurance is Very Expensive in 2021. Why?

The U.S. system, if it even is a system, is hugely complex and fragmented. We pay more for healthcare than most developed nations and get inferior care for the money we spend. Life expectancy is lower in the U.S. than in most comparable countries, as one example. The relationship between healthcare cost and quality is badly out of whack in the United States.

People in the United States are “free” to choose the health insurer they want, but each insurance company has its own rules for enrollment periods, coverage, and methods of reimbursement. Providers have to spend money on salaries for staff who deal with insurance companies. Some doctors have started choosing not to accept insurance at all and charge far less for their services because they can reduce their overhead costs significantly.

Health insurance companies are corporations, so they exist primarily to return profits to owners and pay very high salaries to upper management. That means that some of what you pay in premiums pays for high salaries and profits instead of healthcare. Any system will require management, but private companies pay much higher salaries. How big is the healthcare insurance industry in the United States is a large part of the problem.

So the problems are:

Highly complex, fragmented system.

Hundreds of individual health insurance companies.

Health insurance premiums pay profits and large salaries for corporate managers.

Insurance Costs for Families only Get Higher

In the near term, insurance costs will likely only increase. Some members of Congress are working on ideas to try to reduce costs and insure more people. Insurance depends on “risk pools,” or group of people who pay into the system, then have their covered claims paid. The larger the risk pool, the easier it is to predict what costs will be and the more people pay into the system, creating a larger pool of funds for paying claims. It is not at all clear why we divide the United States into risk pools according to their employers, which is mostly irrelevant to the question of health insurance. To the extent that some occupations have higher rates of injury or illness, it makes more sense to include them in a larger pool to distribute their elevated risk more evenly.

What is the Impact of COVID-19?

One major impact of COVID-19 has been to increase the use of telehealth, which allows for virtual visits without exposing anyone to the virus and is much easier for people who have transportation limitations. This, in turn, is encouraging more use of electronic payment systems and health records, which should improve the efficiency of the entire system.

We don’t know yet, but COVID-19 may be helping create, unintentionally and higgledy-piggledy, a lot of the infrastructure we would need to provide adequate healthcare to everyone in the country. We have rapidly built the capacity to vaccinate everyone, or we will have by the time we actually do vaccinate everyone. The spread of a highly communicable, new virus also helps make the conceptual point that all health is public health. Every individual’s health can impact every other individual’s health.

How Can You Make Sure You Are Not Paying more than You Should be for Health Insurance?

The Affordable Care Act (ACA), which a lot people call “Obamacare,” offers subsidies to many families to pay for health insurance. It also provides for advisors to help people understand their options. It helped avoid a health insurance collapse.  Another option is to choose a plan with a high deductible and a Healthcare Savings Account (HSA). An HSA is a bank account that you can put pretax income into and use only for medical expenses.

Be aware, however, that a high deductible plan assumes that you will pay for all of your healthcare out of pocket before you hit your deductible. If you anticipate having medical expenses that will exceed your current income, a high deductible plan is not a good idea.

What Can I Do To Lower My Health Insurance Costs?

One easy way is to use a Health Maintenance Organization, or HMO. In an HMO, you use only doctors that are part of the plan, except in emergencies, and accept other limitations on your choices in order to allow the insurer to negotiate better prices with providers. High deductible insurance plans usually have lower premiums, so that is another option, if you can make it work.

Why you need health care can make a difference. If you have been injured in an accident, you may need to talk to a personal accident attorney like mosheslaw.com. By making the right choice, you will save your money.

What Paying For Healthcare Will Look Like in the Future

Patients bear a growing burden of the cost of healthcare, and transparency in cost and pricing is a major issue. Most people want to know better what healthcare is going to cost before agreeing to visits and procedures. They want to know the true cost of healthcare. Providers also want to get paid faster. Healthcare organizations will follow the financial services industry to more electronic transactions to improve in these areas.

Conclusion

The U.S. system for healthcare delivery and insurance is barely a system at all. It is highly fragmented with thousands of providers operating in their own silos and only rudimentary mechanisms to communicate with each other. The result is very expensive health insurance and worse medical outcomes than most comparable countries.

Options for families and individuals who want to reduce their costs are few, and amount mostly to relying on insurance exchanges under the Affordable Care Act and the subsidies it provides for anyone who does not get health insurance through their employer.