The costs of Health Insurance is rising 15% for next year( See several articles.). I have studied several plans and they all seem to come in at that number. A somewhat out of the way but typical example come from Alaska which states:
"Individuals seeking personal health insurance will see their rates raise an average of 17.5 percent this year, while businesses with two to 99 employees will see rates increase 21.7 percent, says Katie Campbell, actuary for the Alaska Division of Insurance.
"Individuals seeking personal health insurance will see their rates raise an average of 17.5 percent this year, while businesses with two to 99 employees will see rates increase 21.7 percent, says Katie Campbell, actuary for the Alaska Division of Insurance.
Those increases compare with a nearly 32 percent average rate increase in 2008 for individuals and 28.8 percent for employers of up to 99 people, Campbell said Oct. 16"
The question is, why?
1. There is no inflation, in fact the opposite is true so it cannot relate to that..
2. Physicians are not being paid more, in fact as the population ages those treating Medicare patients are paid less.
3. However as we stated earlier when reviewing the employment stats, the only increase in employment is in health care, especially hospitals, home care, hospice care, nursing home care. It appears that these institutions are bulking up in anticipation of change and as usual the individuals are paying.
4. Health care costs were at $2.1T in 2006 and are anticipated to be at $2.5 in 2009. This is an annualized rate of 6%, well ahead of inflation, yet well below the 15% number for 2010! Medicare has increased almost 100% for Part B.
5. Notwithstanding these numbers there are insurance increases that far exceed the overall expenditures on health care. One suspects that the insurers are front loading their fees in anticipation.
With Congress discussing public options and the like, what will happen is that the insurers are becoming their own worst enemies and yet Congress is not paying attention.
Now to Medicare. There are several hopefully negative unintended consequences if Congress pushes down Medicare rates.
1. Fewer physicians will accept Medicare patients. We see this happening now especially in major metropolitan areas.
2. Medicare reimbursements are being reduced so that if a physician participates in Medicare the reimbursement is getting to an unacceptable level, lower than costs in many areas. This applies to physicians and not hospitals which seem to be doing fine.
3. If one has a supplementary policy it pays up to say 80% of what the costs are after assuming Medicare pays. Let us examine this scenario. Let us assume a patient needs a hip replacement. The costs of the hospital is say $45,000 and the physician is $25,000. This is a total of $70,000. Now let us assume that Medicare had paid $35,000 to the hospital and $15,000 to the physician. If either participated then they would have to accept that payment. Yet they may charge you more which you pay, the 20% above and in fact the provider could charge more. Thus your supplementary insurance would assist in paying the excess.
4. In anticipation of the reduction in Medicare for 2010, the insurance companies are driving up the supplementary payments.
5. If Medicare becomes so low a reimbursement plan, and if you select a provider who will not accept Medicare, the question is what becomes of the supplementary plan, is it now the primary, leaving you with what Medicare would have paid as well as any excess not covered by the plan? Does this supplementary become a de facto primary for Medicare if you cannot find a provider accepting Medicare. If so, then expect explosive supplementary rates as we are now seeing.
1. There is no inflation, in fact the opposite is true so it cannot relate to that..
2. Physicians are not being paid more, in fact as the population ages those treating Medicare patients are paid less.
3. However as we stated earlier when reviewing the employment stats, the only increase in employment is in health care, especially hospitals, home care, hospice care, nursing home care. It appears that these institutions are bulking up in anticipation of change and as usual the individuals are paying.
4. Health care costs were at $2.1T in 2006 and are anticipated to be at $2.5 in 2009. This is an annualized rate of 6%, well ahead of inflation, yet well below the 15% number for 2010! Medicare has increased almost 100% for Part B.
5. Notwithstanding these numbers there are insurance increases that far exceed the overall expenditures on health care. One suspects that the insurers are front loading their fees in anticipation.
With Congress discussing public options and the like, what will happen is that the insurers are becoming their own worst enemies and yet Congress is not paying attention.
Now to Medicare. There are several hopefully negative unintended consequences if Congress pushes down Medicare rates.
1. Fewer physicians will accept Medicare patients. We see this happening now especially in major metropolitan areas.
2. Medicare reimbursements are being reduced so that if a physician participates in Medicare the reimbursement is getting to an unacceptable level, lower than costs in many areas. This applies to physicians and not hospitals which seem to be doing fine.
3. If one has a supplementary policy it pays up to say 80% of what the costs are after assuming Medicare pays. Let us examine this scenario. Let us assume a patient needs a hip replacement. The costs of the hospital is say $45,000 and the physician is $25,000. This is a total of $70,000. Now let us assume that Medicare had paid $35,000 to the hospital and $15,000 to the physician. If either participated then they would have to accept that payment. Yet they may charge you more which you pay, the 20% above and in fact the provider could charge more. Thus your supplementary insurance would assist in paying the excess.
4. In anticipation of the reduction in Medicare for 2010, the insurance companies are driving up the supplementary payments.
5. If Medicare becomes so low a reimbursement plan, and if you select a provider who will not accept Medicare, the question is what becomes of the supplementary plan, is it now the primary, leaving you with what Medicare would have paid as well as any excess not covered by the plan? Does this supplementary become a de facto primary for Medicare if you cannot find a provider accepting Medicare. If so, then expect explosive supplementary rates as we are now seeing.
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