US residents with employer-based private healt...

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As part of my work at the AGO, I feel it necessary to understand more about the health insurance policies out there. It’s important to note the general types (PPOs, HMOs, etc.), but more importantly the monetary attributes to each plan.

The New York Times just released an article with research by the Kaiser Family Foundation about the expense of premiums. The Kaiser Family Foundation is a research organization used at many different levels (cited by the Mass. AGO as well).

The article talks about the rise in costs to consumers. For years we have seen huge increases in the premiums of plans. Some requested increases by insurance companies are up to 54% rise in premium rates. This is appalling, in my opinion.

I completely agree that we must ensure that insurance companies remain viable and lively companies, but regulators must also do justice to their jobs – regulate the companies’ obsessive need for higher premiums. If you give me $10, I’m going to spend $10. If you give me $7.50 (25% less) I will spend 25% less. This same principle applies to companies. The more you allow them to take from consumers and use, the more they will charge and spend.

Requiring that companies use 80% of premiums for medical service expenses is a great way to ensure that the money isn’t simply being used to pay investors and executives for their time and trust. 80 cents of every dollar received from premiums being devoted to the consumer’s medical expenses is not perfect but makes sense business-wise.

To ensure that companies reign in their costs, we must create more accountability measures through our regulations. This may be the case with the new Obama Care package, but I have yet to hear of how the excessive pricing of medical services will be tamed – preventing abuse by insurance companies and other businesses to draw in more dollars.