One of the major reasons why health insurance is so expensive in the United States is the epidemic of obesity. A 2001 survey indicated that 22% of Americans are obese.” The largest offender of obesity is the southern United States. Mississippi is the fattest state in union. …adding to the trouble, the south has a high rate of diabetes and hypertension. The region is also known for having low amounts to physical activity.” J Bhattacharya and Neeraj Sood, in their paper called “The economics of obesity” report that “the obese contract chronic diseases at a higher rate than the non-obese, and consequently pay more for medical care. ..Among the overweight, lifetime medical costs can be reduced by $2,200 to $5,300 following a 10-percent reduction in body weight. Obesity also has externalities associated with it-namely, mortality and health insurance costs. Because medical costs are higher for the obese and premiums do not depend on weight, lighter people in the same pool pay for the food/exercise decisions of the obese. Furthermore, the negative health effects of obesity decrease the ability of the obese to pay for government- mandated social programs.”
Medical insurance is also expensive because of the advanced technology that is used in the medical world these days. That equipment has improved our chances of surviving illnesses, but does not come cheap. A Congressional Budget Office document of 2007 states that “(M)any analysts attribute the bulk of the growth in health care spending to the development and diffusion of new medical technology or, as one leading observer has described it, “the increased capabilities of medicine.”2 Recent medical advances have made a wealth of new medical therapies available to physicians and patients. Some advances permit the treatment of previously untreatable conditions, which can confer substantial benefits but also introduces new categories of spending. Others advances may improve medical outcomes (compared with those provided by older treatments) but at added costs. Some studies have found that the spread of new medical technology has yielded benefits that clearly justify the added costs on average…”
Before 2000, insurers placed many constraints in the provision of healthcare in order to keep the price of health care down. As the end of the 1990s approached, however, there was rising dissatisfaction from both doctors and policy holders who were not happy with the restrictions that were placed on them. Sometimes people were denied treatments that were recommended by their doctors. Therefore, a less restrictive approach was adopted, but which led to a rise in costs.
Another reason why health insurance is so expensive now is that people pay less from their pockets for medical care than they used to in the 1970s. Because of this, many people seek medical care now because they do not have to make high out of pocket payments. “Out-of pocket payments accounted for 33 percent of all personal health care expenditures in 1975, but by 2005, that share had fallen to 15 percent…Consumers facing lower out-of-pocket costs tend to demand more health care services than consumers facing higher out-of-pocket costs.”
Finally, health insurance is expensive because of advertisements about the wonders of modern medicine which lead to people approaching their doctors to demand the miracles. A project operated from the University of Minnesota did some research on “stories journalists are telling about these new health-care offerings” and found that “those stories are incomplete; at worst, they mislead the public and help push up the nation’s health-care tab”
1. http://www.blurtit.com 2. http://www.ers.usda.gov/publications 3. http://www.cbo.gov/ftpdocs/82xx/doc8255/06-21-HealthCareReform.pdf 4. http://www.cjr.org/campaign_desk/the_high_cost_of_health_care.php