Why is Health Insurance so Expensive

In many ways, the health care industry is a subject surrounded in mystery, because though we are bombarded with health information every day in the media, we know very little about how the health care industry itself works.

In 2008, health insurance has risen at twice the rate of inflation. There are many reasons for this, one of the first being the use of complex technologies that assist in diagnosis and treatment of serious illness. Machines like the MRI (Magnetic Resonance Imaging) and computer-assisted microsurgeries add a cost to each hospital’s or doctor’s bill. In addition, the need for trained technicians to operate and maintain these machines add additional costs to each patient’s medical bill. Another factor that has raises the cost of health insurance is the rise in salaries and benefits for health care workers. The need for specially-trained, reliable workforce to execute the considerable layers of care that are necessary to make and keep us healthy add considerable cost to the final health care product. Other costs include unnecessary surgeries, duplication of services, excessive administrative costs, and fraud.

One of the more controversial ideas on the price of health care has been posed by economics professor Amy N. Finkelstein of the Massachusetts Institute of Technology. She contends that the very fact of having widespread insurance itself adds to the cost of health care. If you have health insurance, you are inclined to use it because it gives the impression that someone else is paying for it. In fact, we always pays for it, and the more widespread that feeling that it is someone else picking up the tab, the more that health care is sought, even for minor conditions that could be cared for in other ways.

A lesser-considered reason for the rise in the cost of health care is that those who have benefited from modern health care now live longer and pass on those genes to offspring who also need care. In the past, these sectors of the population might not have lived long enough to reproduce.

Regardless of the causes, many conclude that would be a good idea to re-think how the population understands their responsibility for their own health, how they use health care, and how much institutional health care should be expected to do for us. In this manner, our health care institutions and trained people can provide health care services for those with the greatest need at the least cost.