Report: Insurers may not be to Blame for Rate Hikes

03/18/2010

Insurance rate hikes are often enough to drive healthy customers to drop their coverage.

Health insurance companies may not be to blame for such premium increases, according to a recent article by the Milwaukee Journal Sentinel. The newspaper spoke with economists who said that hospitals and doctors are responsible for driving health care costs. These parties often charge the maximum price customers would be willing to pay, according to the report.

"Beating up on hospitals is not a good thing because people generally like their hospital. Beating up on doctors is not a good thing because people usually like their doctor," Uwe Reinhardt, a health economist at Princeton University, told the newspaper. "But no one likes their insurance company."

The report referred to data from the Office of the Insurance Commissioner showing that customers at one health insurer experienced rate hikes between 2.7 and 13.5 percent. Another company planned 3.4 to 3.6 percent premium increases.

Ineffective treatments and changing demographics may be responsible for some premium hikes, like the 39 percent increase experienced by one California insurer's customers. These prices have put individual insurance policies out of reach for many consumers, forcing some unemployed Americans and those without access to government or job-based coverage to forgo insurance.

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