Could health policymakers be missing something?

National Underwriter Life & Health recently ran an article about how Obamacare will affect brokers near an article about high hospital costs.

It just seems obvious to me that the real problem here is not with high insurance premiums but with the actual cost of health care.

Most of the members of Congress who created Obamacare just don’t seem to have understood the fact that insurance premiums are driven by actual costs.

When costs rise, insurance premiums must rise.

There was very little attention paid to actual costs in the Obamacare bill. The drafters seemed to want to demonize the insurance companies, and, while doing that, overlooked the real health care cost culprit: The cost of care.

The profit margin of insurance companies is among the lowest for any industry.

When you look at some of the underlying health care costs, it’s understandable that insurance premiums are very high.

Until the consumer becomes more involved in the cost of care the costs will continue to rise. If a consumer pays only $25 to $30 for a $300 prescription, the consumer really doesn’t care what the actual cost of the prescription is.

The same is true for hospital costs.

I recently handled a claim for a policyholder. Let’s call the policyholder “Jane.” (I’m changing a lot of the details here to protect the policyholder’s privacy.) Jane was 57-year-old female who had a heart attack. She died one day after the suffered the heart attack, and her total bill was almost $350,000. 

It seems virtually impossible that two days of health care could cost that much.

The insurance company, of course, paid the majority of the bill. Guess what? The cost of that claim is ultimately passed along to the consumer in the form of higher rates.

It’s just really scary that legislators are making all the rules about something of which they have very little knowledge.

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