Decade-Long Profits Hinder Cost-Effective Health Insurance
There are worries over the cost of health care as the battle now progresses to the Senate. Supporters of reform state that health insurance is attainable if the health care costs are now lowered. They may have a good position there given that recent studies show that these health companies have tripled their profits in the last decade.
This is during a 10-year period that has seen substantial losses in most economic market sectors. While it is sensible that the industry would be relatively resilient–after all, the demand for visiting a doctor or hospital doesn’t go away when the economy slumps–healthcare costs have soared since 2000, making health insurance less affordable.
Health insurance companies are ordinarily the ones getting profit from the expensive healthcare plans. So, there’s no question that they have gained a lot from this over the last decade. According to figures, the six health insurance companies in the S&P 500 have made over $10 billion.
It would seem that these enormous profits are standing in the way of affordable health insurance. However, insurance companies are actually one of the least prosperous sectors of the healthcare industry. Their profits are less than anticipated, because sales of health insurance increased almost as much as profits.
If insurers are not the one responsible for shortage of cheap health insurance then who is? Medical device makers and medical suppliers have seen the most improvement in the past decade. The latter elevated their profits by 15% while the former improved theirs by almost 17%.
At the same time, pharmaceutical firms doubled their profits, while increasing their margins to nearly 25 percent. All of these industries have been responsible for valuable scientific advances in medicine. On the other hand, they have also triggered the soaring cost of insurance during the same time frame.
How can we solve this problem? Control of prices is very unlikely but regulations enacted for the health care bill will be able to help the health care industry and make health care insurance a bit more affordable.
There will definitely be more affordable health insurance if health insurers are not required to pay for very expensive rates for their services and supplies but no one is sure how to make it happen.