Health Insurers Making More Money Than Ever While People Postpone Medical Care

If people continue paying their premiums but use medical services less, health insurers make more money because they have to pay out less. It is an irony that as people struggle and postpone medical care, the insurance companies thrive. It is one of the paradoxes of a recessionary environment

Both UnitedHealth Group and Cigna have noticed a drop in hospital stays and medical use.

So far, the irony is understandable. It is like a year with no natural disasters, insurance companies make more money. However, if they are doing so well why are they asking for higher premiums if they are cash rich and paying off nice dividends to their shareholders?

Some in the health insurance industry say they want double-digit premium increases in case there is a sudden rush in demand when people have more money and start going back to the doctors and hospitals, etc. They also say that care is becoming more expensive.

However, it appears much of America has changed over the last few years. People have become much more conscious about the cost of things. This fundamental change may have an impact on how Americans view their health care options.

Household budgets are being squeezed from many directions. The price of gas has risen, food prices have rocketed, and utilities have gone up. The amount of money in the average American household today after paying off all running costs has gone down. People are much more price conscious today, and doctors and other health care providers have noticed it.

With the high price of gas now, the cost of getting somewhere might impact on a person's decision on whether to drive a long way to see a specialist.

Diagnostic tests are not what they were. The number of patients asking for an MRI or CT scan, for example, when they come in with something that is not life-threatening has dropped dramatically.

Many people are finding that, even with health insurance, they cannot afford to pay for medical or dental work - a growing number of individuals are simply putting things off.

Experts seem to have no idea when (or if) this recessionary mindset will go away.

The chances of a good rebound in the medical market have been undermined somewhat by the increase in how much individuals have to pay for their medical care. Many companies have reduced benefits considerably, they have raised co-payments and deductibles - the patient has to pay much more than he/she used to.

In 2008, 5% of employees who were covered by their employers had a deductible of 2,000, compared to 10% today.

If you are liable for the first two thousand dollars, that is a lot of money to think about.

While in the past many people would opt for brand-name medications, today they want the generic version because they are much cheaper.

Health insurers seem to be sure things will pick up later on this year. And it is this projected rebound that concerns them. That is why they say they need double-digit premium increases - some are asking for 22% rises.

Perhaps insurers are trying to beat 2014, when the health care law comes into full force.

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