Health Insurance companies sell individual health plans in groups of people that choose the same kind of benefits.
A plan has a pool of people in it, as the plan gains more people and the people in the plan pay there premium each month. The plan will start to receive claims for the services rendered to people in the plan.
All the money that comes in to a plan goes in a pot that the insurance company has set up to pay for all the claims that are sent to them from the people in the plan.
What this means is that as long as there is more money coming in, then going out your price really shouldn’t go up. But when more is going out, and this is the case all the time the insurance company raises the price.
The insurance companies try to keep the plans pure with only healthy people, thru underwriting each person who tries to join the plan. They look at the person’s medical history and this works most of the time.
With most health plans about 20% of the people in a plan use it; the other 80% just pay and hope they don’t have too.
When the claims that come in and need to be paid, out weigh the money coming in to the insurance company they have to raise the price.
This then causes a new problem for the insurance company.
When they raise the price the healthy people move to a new plan that cost less. That leaves all the people that are making claims, because those people now have a preexisting condition and can not go to another plan. So the insurance company raises the price again and again and again, trying to pay all the claims that keep coming in from the 20% that caused the rate to go up in the first place.
It seems fair since they are the ones using it.
This is why the health insurance companies want healthy people in there plans. If they only had healthy people they would not have to spend the money that comes in from the premium. This is why the insurance company is business anyway.
If people understood that the insurance companies represent them, they may try to watch how they are being charged by the doctors that treat them. Really the consumer and the insurance company are on the same side, the doctors, hospitals and pharmaceutical companies are on the opposite side they want the money that the insurance company has.
If this is not true do you think the hospital would be able to charge $50 for an aspirin?
Can you imagine what America would be like if nobody had health insurance? We would all have to pay are own bills. Do you think they would still be as high? Do you think a doctor would charge $100 when he rushes in and talks to you for five minuets? Would you pay him that much?
In my opinion only the consumer is a victim in the heath care industry the rest are making money hand over fist.
