Introduction
Researchers have reported an increase in the health insurance premiums and predict a further increase as time elapses. The family cover charge has been on the rise, increasing by more than $100 annually and the mean extra cover increasing by $30 yearly. According to a study by the Kaiser Family Foundation, the past 13 years have seen rates increase by about 113 percent. The rising rate of premiums can be attributed to the rising health care cost, legislation affecting the health care sector and improving medical technology. The health cover is an essential element in the livelihoods of every family as any resulting cost on treatment is paid for by the insurance company. This helps in relieving the family the burden of the high costs related to health care. This paper will explore the dynamics of the family health care insurance, provide a detailed account of the elements that have influenced the rates, and finally expound on the effects.
It is vital to explore on this topic as it touches on the core of the family. Good health care is a priority for every family and health insurance premiums assist the family in meeting the cost of health care, cushioning it against the effects of the high costs of health care. The increase in health insurance premiums has impacted the families shaping their working habits and lifestyles as they deal with the rising costs.
Literature Review
The rising cost of health premiums has attracted several authors, who have shed light on the topic to help explain the scenario. This literary review gives consideration to three articles. The first article titled “Health Insurers Raise Some Rates by Double Digits” by Reed Abelson gives an account of the rising rates of premiums while mainly focusing on some of the states in the U.S.A. The writer observes that health insurance companies within the country have sought and won double-digit increases in the health premiums for some customers. However, this is contrary to the objective of the health care law by the Obama administration, which aimed at stemming the rising rates on insurance premium cost for consumers. The vulnerable group of the increased rates is comprised of individuals who do not have the employer-provided insurance and small business owners. They have to buy the insurance premiums from their income.
Some of the major insurance providers are aiming at increasing their premium rates by over 20% by the end of 2013. For instance Blue shield of California is proposing a 20% increase in some premiums. On the other hand, Anthem Blue Cross is seeking a 26% increase. The same situation has been experienced in Florida and Ohio states where insurers have raised their policies by above 20%. The health care law provides that the regulators have to review any requests for rate increases above 10%. In some states, the regulators have the authority to deny and cut rates that are deemed to be excessive. Despite the legislation denying excessive rate increases, some insurers in some states are still making proposals for double-digit rate increases. The insurers cite the rising costs as the reason behind their request for increasing the premium rates. This has elicited concerns from consumer advocates who propose for new laws of operation by the insurance industry. The consumer advocates allege that the insurers operate plans, which are closed to new customers, and hence create in a group of people with expensive medical conditions that demand high costs to insure.
The second article by Kate Rogers titled “How to combat rising health insurance premiums” provides the reader with the current state of affairs in the insurance industry while giving advice on the measures that families should take in order to cope with the rising cost in premiums. The writer posts that the family insurance plans with comprehensive benefits is on the verge of experiencing high costs as additional measures of the Patient Protection and Affordable Care Act become implemented. Essentially, premium plans that cover prescription drugs and maternity care are prospected to increase by near half by the end of 2013. The comprehensive list of health benefits on a monthly average are currently higher by 47% than the same in 2012. The writer provides information relating to the type of benefits that will be added as per the requirements of the ACA (Affordable Care Act) scheduled for full implementation by 2014. With the requirements of the new benefits for individual, the premium rates are unlikely to lower unless the family is eligible for the government subsidy. In the final section of the article, there are tips provided by Nancy Thompson, vice president in the employee benefits of professional business support company CBIZ as regards how families can save on the health care premiums under the healthcare reform law. First, the family or individual should look for an employer coverage as the cost will likely be highly controlled when employers pay for the insurance cover. Second, individuals are advised to have a flexible spending account as they are tax free and use it for covering medical costs. Finally, she recommends for individuals to have knowledge of the maximum out-of-pocket costs and risks. In this way, one can spend out-of-pocket on health coverage with a low-value plan and supplement it with comprehensive voluntary offerings.
The last article by Mathew Davis provides the comprehensive effects of the rising insurance premiums. According to Davis, a 10 percent increase in the health insurance cost translates to a reduction in employment chances by about 1.6%. The soaring insurance premiums are pushing individuals into part-time jobs, and force the workers to sacrifice wages in order to sustain the health coverage. The vulnerable individuals with the rising costs are the hourly workers because there are regulations that dictate the extent to which an employer may reduce the wages to cover the rising cost. In response to the high costs, the firms are offering plans with a certain base amount of coverage in areas such as life insurance, retirement and health. The employees who feel that they need more benefits have to spend their net income or shift some of the benefits to one area. Currently, employees cover about two thirds of the insurance premiums using their salary while the other one-third paid by the employer.
Serious societal implications are in the offing particularly if the employers are to absorb the rising rates of the health care premiums. For instance, if the government demands that all the employers provide insurance coverage, it is likely that they will hire employees on a part-time basis as it would be economical to page hourly wages rather than monthly salaries. The rising rates in health care insurance premiums will add a burden to employees and increase the number of uninsured and unemployed. There are possibilities that the rising rates of health premiums will hinder individuals from paying for insurance products leaving them vulnerable to risks such as disability, health and mortality in the long-term.
The understanding on the topic
The cost of health care insurance premiums is soaring at a very high rate eliciting concerns from the consumer advocates and families. According to the studies, the rates have already increased by double digits and prospected to grow in the coming years. The main causes that are attributed to the rising costs by the insurers are the rising costs of health care. However, consumer advocates blame the insurers for arranging coverage plans that are closed to new customers, and hence create a group with expensive medical costs. Another factor that has played a significant role in the rising cost of premiums is the government legislation. More significantly, the new legislation mandates the employer to pay for the health coverage of their employees. However, this is becoming harder as the rising cost in premiums is driving the costs of operation of the firms. Consequently, instead of the firms hiring permanent workers, they seek to employ workers on a part time basis. This way, they are able to decrease the coverage while observing the regulations. The unemployment rates are also expected to rise owing to the increase in the health insurance costs. Additionally, the number of uninsured individuals is also expected to rise given that the employers change their hiring plans.
The primary group that has been hit hard by the rising cost of premiums are lower-waged hourly workers. It is becoming impossible for them to purchase insurance products given their low source of income, and lack of coverage from their employers. This leaves them vulnerable to a high cost of medical services in case they get sick. Additionally, they face the risks of the high cost associated with insurance products such as mortality and disability. Although the federal, government is seeking for the enactment of health policy considerations, as regards the associated costs need to be done in order to safeguard against adverse impacting consequences to the society.
Conclusion
In conclusion, the health insurance premium costs are rising at a rate that is making it impossible for a majority of the low-waged workers to secure health care coverage. Additionally, it has the ripple effects in the hiring industry where employers hire workers on an hourly basis. This is to ensure that the costs of operating the firms remain manageable. As is evidenced from the literature review, the most vulnerable individuals are lower paid workers. These workers cannot afford to pay for the premiums using their income, and the employers have not paid any amount of the premiums for the terms of hiring do not require for the employer to make the payments. The main consequence of the rising costs is that many employers seek to drop the coverage of the employee’s health insurance premiums by revising their hiring terms. The number of uninsured will also increase making it challenging for the payment of health costs.
References
Abelson, R. (2013, January 5). Health Insurers Raise Some Rates by Double Digits. Retrieved from The New York Times: Business Daily: http://www.nytimes.com/2013/01/06/business/despite-new-health-law-some-see-sharp-rise-in-premiums.html?pagewanted=all
Mathew, D. (2013, February 3). Effects of Rising Health Insurance Programs. Retrieved from National Bureau of Economic Research: http://www.nber.org/digest/aug05/w11063.html
Rogers, K. (2013, March 21). How to Combat Rising Health Insurance Premiums. Retrieved from Fox Business: http://www.foxbusiness.com/personal-finance/2013/03/20/how-to-combat-rising-health-insurance-premiums/#
