Healthcare Reform Will Increase Insurance Premiums? A Scare Tactic.

Recently America’s Health Insurance Plans (AHIP), the lobby for the health insurance industry, released a report that claims the Senate Finance Committee bill would result in higher health care premiums for America’s families.  Well, at least in my experience, we certainly seem to be having significant rate increases in the absence of reform legislation.  Our private health insurance premium has increased almost 150% since 2005, and we just received notice of a one year increase of 33% for 2010 alone.

In 2005 we were paying less than $650/month for our health insurance plan and admittedly it is a good plan.  We just received notification of our rate increase for 2010 and the cost of our plan now exceeds $1,600/month (approaching $20,000/year) – almost a thousand dollars more a month to keep the same health insurance plan in place that we had just 5 years ago.  Options do exist for lowering price such as increasing out-of-pocket expense.  But even if we incurred a ten-fold increase in out-of-pocket expense for this coming year, the premium would still be 40% higher than what it was just 5 years ago, and there is no telling what the next year will bring.

In 2005 my wife developed an acute leukemia and in 2007 suffered a serious relapse, both requiring extensive treatment and extended hospital stays.  The insurance carrier states that our individual claims do not impact rate increases but that rates are determined by increasing medical cost trends, age, region and choice of benefit plan.  The plan we currently have is appropriate for us as there is no lifetime maximum benefit; my wife’s medical costs have been substantial to date and we are hopeful that we have seen the last of it; but we need to be prudent.

Although we are fortunate to be able to bear this cost, a 150% increase in just over 5 years (or increasing out-of-pocket expense 10-fold while still incurring a 40% increase in premium) would be out of reach for many families.  This could result in either abandoning health insurance or considering less expensive plans with reduced benefits.  The consequences of either choice could result in bankruptcy or even loss of life.  Indeed, it is possible for the less fortunate of our citizenry to get priced out of the market, even with serious illness in play.   Significant rate increases already exist in the absence of healthcare reform legislation, so let’s stop using that as a scare tactic.

Secondly, I have heard comments from opponents of health insurance reform that healthcare should be treated the same as any business in a free market.  I’m not sure what good that free market does for an individual, like my wife, who has a pre-existing condition.  Should we lose our health insurance she could be denied coverage or have to pay exorbitant rates should another carrier even take her.  Free market choice exists, as long as one is well; if not the free market might not want you.

Alan Grayson (D-FL) I believe has it right.  Opponents of health insurance reform are expressing concerns about free market enterprise and the profitability of an industry when tens of thousands of our citizens are dying each year because they do not have health insurance.  For a country having the largest economy in the world this becomes a moral issue.  The ability of an individual to get health insurance in our country can be decided by whether or not they are a profit risk to a corporation.  We as a country stand apart from other major democracies in that we do not contribute to the health and well-being of our own citizens, even the less fortunate amongst us – we simply tell our tax paying citizens that they are on their own when it comes to affording healthcare (see my related article on Healthcare Reform on this blog).

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