The Cost of Health Insurance

Although health insurance can be costly, it’s not nearly as costly as opting not to carry coverage. One major medical emergency is enough to send the average American family spiraling into debt.

Not that those with insurance are off the financial hook, however. According to the Kaiser Family Foundation and the Health Research and Educational Trust, premiums for employer-sponsored health plans in the United States since 2000 have been rising four times faster than workers' earnings.

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Factors That Influence Health Insurance Costs

Several factors can cause the cost of your health insurance to vary. These factors include:

• Location: Some states regulate health insurance more heavily and require more coverage. Also, some areas of the country have populations that seek more specialized or expensive medical care (for example, Florida, with its vast number of senior citizens) which drives up the general insurance costs of that area.
• Age: Insurers compare the medical risks of different age groups relative to other age groups and adjust their rates accordingly. A higher than average age risk factor will result in a higher premium.
• Gender: In general, gender has less impact than age, unless maternity coverage is involved.
• Occupation: Certain occupations – such as police work, mining, or firefighting - are considered high risk and those employed in these occupations will often pay higher insurance premiums.
• Preexisting Conditions: A preexisting condition, or medical condition you have before enrolling in an insurance plan, can result in high premiums, limited payments, or denied claims.
• Tobacco Use: Certain insurers will raise prices as much as 35% if you are a smoker or tobacco user.

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Political Climate and Health Care

Political climate can also influence health care costs. In general, democrats have focused on expanding access and coverage, while republicans have focused on cost containment. After John F. Kennedy made health insurance a priority issue in his campaign, the idea gained popular support. After the Kennedy assassination, Lyndon B. Johnson, with the help of a democratic majority in congress, was able to Medicare and Medicaid as law, providing thousands of seniors and low-income families with physician and hospital services they were previously denied or could not afford.

In 1993, Bill Clinton and his wife, Hillary Rodham Clinton, presented congress with their “Health Security” plan, which combined elements of previous proposals with new ideas surrounding cost containment and insurance competition. However, the complexity of the plan combined with opposition from insurers and health care professional eventually led to its downfall. This, in turn, helped breed the market-driven climate of today’s medicinal and insurance providers. Health care and insurance costs continue to be a much-debated issue.

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