Why are Health Care Costs Rising in the US?
Amidst the recession, the cost of health care is still on the rise each year in the US. This makes a lot of us wonder why this is so.
In a study conducted in the year 2009, PricewaterhouseCooper (PwC) suggested that the reason behind continuous increase in health-care costs is the concern of many Americans that they may still lose their job in the coming years due to recession. The result is an increase in the use of their health insurance policies. Other factor which may influence this increase includes rising unemployment, increased percentage in the population which is covered by Medicaid and increase in the number of the underinsured and uninsured in the population and drop in membership of commercial health plans.
Major causes of increased health care costs
Technology and Prescription Drugs
New medical technology has saved millions of lives all over the world, particularly in the US. New drugs has been made and formulated. But at who will pay the cost of these researches?
Drug manufacturers become successful in discovering new and effective drugs thanks to state-of-the-art technological equipment invented by scientists and engineers. According to analysts, this is the reason why there is a regular increase in the price of medical expenses, particularly in drugs and treatment procedures. Of course, these companies will not invest in something that they will not profit on so they charge the cost of these equipments to their loyal customers, the public.
There is a tremendous demand for efficient health care system. As more and more people are educated with ways of possibly increasing a person’s life span the growth of policies which will help secure the future treatments of ongoing illnesses and long term care for senior citizens in nursing homes increases. At present, the budget of the US Government rests primarily on national health expenditures.
Aging of the Population
As technology helped saved a lot of lives and improved the lives of majority of the Americans, the ratio of senior citizens has also doubled in number. This means more citizens who will qualify for Medicare in the years to come.
Careful analysis of the costs of our medical treatments will reveal that 7% of our health care expenditures do not fall on the actual treatment or the physicians and personnel who are attending to our needs. This percentage is rather used for the administrative costs of health insurance programs like the marketing and billing departments of these companies. The larger the company is the more likely for them to have greater expenses. So never wonder why bigger and more established companies often charge more in their premiums. They pay more personnel to ensure that you will get the best insurance service that you deserve.
At present, several preventive measures are being made by the government to remedy the increase in health care costs. Many are optimistic that this will be fulfilled in the future as more quality and efficient programs are being studied by the government which will help lessen the medical expenses of the public.