Health insurance costs, rising twice as fast as inflation, are now challenged by the Health Reform Law of 2010
Posted July 21, 2010 
Comments(0) Yes, the cost of health insurance continues to rise every year, currently rising at twice the rate of inflation. Even with fiscally responsible health providers, costs have not been contained. Any major health crisis is costly; the state of the health arts employs technology and medicines that are expensive to build and produce. The cost of research has to be covered, and the dividends investors earn for taking risks on pharmaceutical products in development must be paid. It’s thanks to them and the researchers that many life threatening diseases have met their match. While we can expect these costs to continue, the hope is that all diseases humans encounter may be defeated. We do not necessarily have to accept continually rising costs, reflected in health insurance costs and the taxes we pay each year. The Health Reform Law of 2010 that was passed on March 23rd is designed to diminish rising costs.
One of the major factors that raise our health insurance costs is that many citizens, especially the poor, are uninsured. Without insurance, they are not able to get medical treatment at the early stages of their ailment. By the time they do see a doctor, it’s at the emergency ward where the cost is highest. Unable to turn these people away, either because of medical ethics or state and federal laws, these hospitals will treat the patient and turn to either the state or federal government for compensation, or increase the charges for people who are able to afford health insurance costs.
It is for this reason that the recent Health Reform Law has, as its centerpiece, universal health care coverage for all U.S. citizens. By helping the poor cover health insurance costs, it will be virtually impossible for a poor person to abstain from getting health insurance from whatever insurer they choose. The law will now subsidize the poor, covering the insurance costs they are unable to cover on their own. 24 million of our nation’s poor will be subsidized, with the $350 billion the law allocates to this effort.
Although the law will also prevent insurance companies from denying coverage to people with pre-existing conditions, and will curtail lifetime caps, thus requiring insurance companies to pay for more than they previously did, the increase in policy holders, including those 24 million people backed by the $350 billion allocation, should offset these new expenses. If the poor are now able to seek treatment earlier, emergency room costs will go down, saving even more money. Theoretically, the savings will reduce health insurance costs across the board.
This Health Reform law also stimulates the health insurance industry and may bring down health insurance costs for everyone. An increase in demand and an adequate supply of insurers means insurers will be competing with each other to provide the most robust product at the lowest price. With an increase in competition, more insurers will become transparent. Their administrative costs will decrease as they rid themselves of wasteful policies and procedures in order to price their products competitively.
Other projects are also being explored to reduce the cost of health insurance, and this law should be considered just the first step. What is certain in the debate is that whatever efforts succeed, medical costs will continue to rise. The goal, then, is not to curtail the rise, but to diminish it and keep it under control. The benefit to the consumer is that they will be able to get health insurance and be able to afford it, even if it means being subsidized by the government. Health insurance costs may continue to rise at a slower rate, but the overall health of America should reach an all time high. A healthier America is the true promise of the law, and who wouldn’t welcome that?
Tags: health insurance cost, health insurance