Rising Costs, New Drugs at Heart of Health Insurance Crisis
A study of health insurance costs in northern Ohio performed by the management consulting firm of Hewitt Associates shows health insurance costs on the rise at an average rate of 16% per employer.
The underlying cause seems to be the rising costs of medical care, and in particular the rising costs and increased usage of prescription drugs. It is estimated that the amount Americans spend on prescription drugs has doubled in the past five years. Much of the demand for prescription drugs is a result of direct advertising campaigns geared at making people more aware of drug choices, and the availability of drugs such as Viagra aimed at changing the lifestyle of users.
If health insurance prices continue to rise at an annual rate of approximately 12%, it is feared that as many as 750,000 people could lose health care coverage each year as a result of either not being able to afford the continued coverage or employers choosing to drop coverage for their employees.
Some employers have chosen to combat the rising costs by passing more of the health insurance cost through to their employees. As many as 70 percent of employers report passing through at least some of the increase in the cost of health care to employees.
Wouldn't it make more sense to simply remove health insurance as a benefit of employment, increase the pay of workers accordingly, and let individuals shop for the health coverage that they specifically need, just as they shop for auto insurance? Rather than providing comprehensive group plans that attempt to cover all types of medical emergencies, why not entrust the choice of the type, cost, and provider of coverage to the people who know what they need? The proliferation of employer-provided group health plans has stifled the ability of health insurance providers to compete for customers in a free market.