If most Americans were honest, they would admit they know very little about the on-going battle for health care reform in the United States. They do, however, share common concerns. Will the changes make health insurance cost more, or will coverage become inexpensive enough that recession-strapped Americans can actually afford to pay the rates?
Limited Government Power to Regulate Rates
The simple fact is that the law does not empower either the federal government or the states to actually say no outright to insurers intent on raising rates. Each state has its own laws regarding insurance rate reviews, and some are more aggressive than others.
There are also complex interactions the affect the cost of insurance that leave many Americans puzzled, angry, or both. For instance, in California, the insurance industry wants to block legislation that would give the state’s insurance commissioner the authority to veto premium cost increases that are judged to be “excessive.”
Doctors in the state are actually on the side of the insurance industry. Why? Because they’re worried they might lose money if insurers are forced to lower their premium rates. This is not unlike the reaction of drug companies to programs affording seniors lower cost drugs through Medicare provisions.
Profit and Politics Heavily Influence Health Care Costs
It would be idealistic to assume that all players in the health care drama are actually, primarily concerned about the quality and cost of health care. There is a tremendously profitable interaction between the insurance industry, the medical field, and big pharma drug companies. All profit from this web of relationships and all stand to lose money in the face of more stringent insurance regulations.
An additional complication in state regulation of the cost of insurance stems from the recession itself. Many state governments simply do not have the funds to hire consultants and staff to analyze and review insurance rate hikes to judge if they are fair or not. Politics can also play a role in a state’s decision to opt out of health care reforms that touch on the insurance industry.
Florida, for instance, is a Republican state. The vast majority of Republicans do not support the Obama administration’s attempts at health care reform. Therefore, Florida returned $1 million in federal money that was intended to have been used to review proposed insurance cost hikes in the state.
There are also instances of what can only be termed laziness on the part of state governments. Oregon has repeatedly approved double-digit insurance rate increase in the recent past. Why? They data the state examined to determine if the costs were fair was provided by the insurance industry itself!
Insurers Are Working to Regain Lost Profits
As a whole, companies that provide health insurance are fighting the provision of the federal law that requires them to spend 80 percent of premiums on medical services and quality improvements. If they don’t, by law, those premiums have to be refunded to consumers. Basically, the industry has attempted to compensate for the lost revenue that provision suggests by cutting benefits and raising other fees across the board.
Most economists agree that major policy changes affecting consumer economics, including changes to the already chaotic process of health care reform, will likely be put on hold until after the 2012 presidential election. In the meantime, consumers will have to protect themselves, finding the most inexpensive coverage they can through online quote engines, and staying abreast of current developments so they understand the new methods insurers are using to hit their pocketbooks hard.
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