The Cost of Doing Business. At Your Expense.

As the Affordable Care Act continues to go under attack, potential repeal and replace seems to be inevitable at this point. The struggle with it among the majority of Americans is that is simply wasn’t “affordable.” 

I find it intriguing that we only focus on the cost of health insurance premiums, and forget to piece together why it is so high. Health insurance is set up to pay for health care, right? Have your ever taken a look at what health care facilities are charging for services? 

As you can see, we are spending much more in healthcare than any other country. The average person in our country spends $8233 a year on healthcare, and if you total it up, it actually comes to 17.6% of the GDP in the US. 

So, here is food for thought. 

If we are spending considerable more money on health care than any other country, we should be getting healthier, right? 

Unfortunately, we are not. The average life expectancy of Americans is dropping, and has been since 2010. We are becoming more and more overweight, using more and more medications, and the cost continues to rise. 

As a business person, imagine being an insurance company. You know that the services you are supposed to cover are getting more expensive, and more of your clients are needed those services every year. To stay in business, you have to make a profit, and unfortunately, the only way for an insurance company to do so, is to pass the cost onto its customer. 

But is that the only way for insurance companies to survive?

The Swing and Miss by ObamaCare..

 Canada has free healthcare. Right? So many wanted for the US to model after Canada and let ObamaCare do just that. Provide premium healthcare at a reduced cost. Many that couldn’t afford health insurance hoped that ObamaCare would fix all of their problems. 

The only issue is, ObamaCare forgot to address one key component.

Health insurance companies are in the market to sell premiums, use that money to invest, make profit on, and have enough to pay your medical bills if they have to. They use foresight on your current health status, mark your premiums, and set your deductibles/out of pockets, to ensure they are making a profit with a minimal risk margin. 

So, why did it not work?

There are many reasons, and I do not want to get political, but this blog is to help describe one major flaw. When designing our healthcare reform, the administration only focused on the American’s health insurance interest, and failed to address the product that ObamaCare was to pay for. 

As you can see from the picture, the cost of healthcare in the US is out of control. A medication as simple as Nexium can be 10X more expensive in the US as Canada. Enbrel can be up to $3000/month. How can we expect our government driven health insurance plan to function, when our government does not put the Pharmaceutical industry in check?

Hospital costs are no different. No surgery is simple, and complex situations happen, but at this stage in our health care system, an angioplasty is a pretty routine operation. Blockage of the heart is removed, and a stent is often put in place to keep the artery from collapsing. 

“According to the Blue Cross Blue Shield of Tennessee, if the procedure is done without any assistance from the insurance companies, you can expect to pay anywhere from $30,000 to $48,000 at a minimum.”

And if you are going to get the little stent put in, the device itself can cost up to $3000. 

I am in no way shape or form trying to promote the search for “discounted healthcare” I am just trying to help you understand why insurance premiums continue to rise, and in reality, ObamaCare isn’t really to blame. 

Our healthcare industry in America has gotten out of control, literally, with their costs. There is no mandated restrictions of costs of procedures. Hospitals are a “for profit” business type and a melting pot for inflated insurance costs. 

Before pointing the finger at our insurance company for how high our deductibles are, how how our premiums are, and how little they want to cover, we have to address the elephant in the room. Healthcare costs have got to come down before any health insurance plan can work. 

Feel free to comment to continue this discussion.

​-Dr. Mozingo

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