Factors That Influence Health Insurance Rates

There are many opinions about why health insurance rates are increasing. Seldom do you hear that insurance costs are directly related to the cost of care, but it is absolutely true. To look at the cost of insurance, we need to consider what factors into the cost of care.

The following are the major factors influencing the cost of health care and are paid for by the party who gains the most benefit, the patient:

• Cost of medication and equipment used
• Development
• Approval
• Manufacturing
• Shipping
• Cost of medical personnel as it relates to the importance and gravity of performing flawlessly in their profession.

Most often these factors are paid through an insurance company or government entity (Medicare/Medicaid). Both of which are programs designed to decrease the volatility of the costs. If the cost of care increases, the cost of insurance or any other medical program must increase.

Understanding the underlying factors of what determines the cost of insurance is the first step to making the overarching healthcare system more efficient and less costly. Placing blame squarely on insurance companies, Medicare and Medicaid as the reason for raising health insurance rates is simply not going to fix the problem.