The High Price of Health Insurance

Along with the price of a gallon of gas, one of the biggest issues facing the United States (and most other countries, for that matter) is the availability and price of quality health insurance. It's quite likely that literally millions of people are currently without health insurance – and that number includes scores of children. This assuredly begs the question, "Why?" Exactly why does health insurance cost so much?

Well, regardless of what anyone tells you – whether it be your congressman, doctor, pastor or your Uncle Herbert – it must be understood that the bottom line of the whole industry is this: healthcare and health insurance are businesses (big businesses) and they're run by businessmen. The fundamental idea of any business is to make more money than you spend. This holds true for health insurance, as well. If they were to find themselves habitually paying out more money than they were bringing in, they would soon find themselves out of business.

Insurance companies quote premiums to their clients based on age. It's likely you've heard it a thousand times in various commercials. For instance, they'll say that a 29-year old non-smoking male can be insured for $120 monthly, which sounds great. It may even be cheaper than your employer's plan. But what they're not telling you is what's disclosed in that tiny, tiny writing at the bottom of the screen; in other words, the 'fine print.' The person that gets this rate must have no reason to ever use the health insurance. Put more succinctly, he must be in pristine health with no pre-existing conditions. The insurance company won't use those words in their ads; but that, in effect, is the reality. Also, the deductible for this person may be $1,500 or more yearly. Some deductible options can be as high as $5,000.

What is a deductible? It's the amount of money that you personally must pay for any covered medical services before the insurance policy will start paying benefits. (The deductible doesn't apply to everything in the policy, so be sure to read the terms carefully.) It's fairly safe to assume that, for most people, a policy with a $5,000 deductible would be useless. They'd be better off not having insurance at all, and paying everything out-of-pocket – which, in essence, is what they're doing plus paying healthcare premiums. Why pay someone else to insure you when you're probably not going to reach the level of annual medical expenses required before you receive any benefits?

For these reasons, many will be quoted rates that are far above the payment amounts presented in the companies' ads. Some individuals may even be deemed uninsurable (though today this is a relative rarity). Unfortunately, these higher premiums make it impossible for countless number of people to afford health coverage from private insurers. That leaves them between a rock and a hard place – without health insurance.

What can you do about it? Well, until the political and/or ideological systems changes (and you probably shouldn't hold your breath waiting for that to happen), healthcare will continue to be, first and foremost, a business. Talk to friends, family members and insurance professionals, and do your research to find all the options that are available to you.

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