Why Ohio Health Care Costs Are Rising
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Ohio health
insurance premiums are rising, even for those who do not use a lot of health
care services. According to a survey conducted by Kaiser Family Foundation and
the Health Research & Educational Trust, premiums have increased nationally
by 97% in less than a decade, about three times as fast as wages and inflation.
This is a worrying trend because more Ohioans are
looking to purchase coverage to meet the requirements of the Individual Mandate.
Moreover, spending more on health insurance would mean having less to spend on
essentials like food and gasoline. Understanding and controlling the factors
that contribute to rising costs of health care can help slow down the rise in
premiums to some extent.
Factors
Contributing to Increased Expenses on Health Care
Ohio health
insurance companies fix premiums based on age, location, and the costs to pay
for members’ claims. According to leading health insurer Anthem Blue Cross Blue
Shield, 87% of premiums are used to pay for medical services and products, 10% goes
to cover administrative costs, and 3% to health insurer profits. It is the
costs to pay for the claims of the insured that are going up and causing Ohio health
insurance premiums to increase. Here are the main reasons why health care costs
keep rising:
- Use of advanced medical
technology: The more frequent use of costly technology
and high-tech procedures is one of the main reasons for the rise in health
care expenditure. While some procedures or lab tests may be necessary and
improve the quality of care, others are not. Ohio
health insurance claims for new, advanced procedures are naturally higher.
- Increasing use of prescription
drugs: It is estimated that about two-thirds of
Americans fill in a prescription every year. Prescription drugs are
costly. The use of prescription drugs is increasing among Ohio
adults with drug coverage. Though generic equivalents cost less, they take
time to come into the market.
- Detrimental lifestyles: Chronic
diseases are responsible for up to 75% of the yearly expenditure on health
care in the U.S. Many
Ohioans lead unhealthy lifestyles which contribute to problems such as
obesity and heart disease, raising the burden on the health care system.
The U.S. Centers for Disease Control reported that in 2011, up to 29. 6
percent of Ohioans were obese. According to a recent study, up to 59.8 of Ohio’s
adult population could be obese by 2030.
- Repeat tests and unnecessary
healthcare services: A new study by the Dartmouth
Institute for Health Policy and Clinical Practice shows that many Medicare
beneficiaries are subject to repeat medical tests, leading to
over-diagnosis and unnecessary treatment. Such repeat tests and
unwarranted use of healthcare services including emergency rooms are driving
up healthcare costs.
- Health insurance fraud: Instances
of Ohio health
insurance fraud include inflating claims, submitting wrong facts in order
to obtain insurance coverage or lower premiums, submitting false claims,
or filing claims for health care services not received. Health insurance
fraud ruins the victim financially. When insurer costs increase, it results
in rising health care premiums for everyone.
- Costs of compliance with
laws by Ohio health insurance companies: Anthem reports that private
health insurers in the U.S.
spend about $339 billion a year to comply with federal rules and
regulations. These expenses are for screenings, filing, and
reporting. Insurers raise premiums
to factor in these costs.
- Cost shifting:
Medicaid and Medicare rates are lower than those offered by private
insurers. Lower coverage by these public programs result in shifting of
health care costs to private insurers. This raises premiums for
individuals and employers who rely on private insurers to pay for their
medical expenses.
Role of
Health Reform and Ohio Health Insurance Companies
Health reform aims to control health insurance
costs. Ohio will
soon have a federally-run health insurance exchange where individuals and small
businesses can purchase affordable coverage. Health care law has provisions
aimed at checking insurance fraud, patient outcome-based reimbursement for physicians,
and more.
Ohio health
insurance carriers such as Anthem are working to help
members save expenses on care by helping them get discounts from service
providers, encouraging use of generic drugs, encouraging healthier life styles,
and fighting fraud. Insurers are also striving to reduce their own costs so
that they can provide health insurance Ohio at
more cost-effective rates.