Health insurance premiums are a reflection of the underlying costs of care. When the cost of medical services such as doctor visits, hospital stays, and medical devices increases, these costs drive a corresponding increase in premiums. Federal government data show that over the past 20 years health benefit costs (i.e. how much the nation has spent on medical procedures, treatments, doctors’ visits, etc.) have increased by an average of 7.2 percent annually and premium increases have averaged 7.1 percent annually. These data demonstrate that health care costs and premiums go hand-in-hand.
Calculating health insurance premiums is a relatively straightforward process driven by four main factors:
- Cost of medical benefits;
- Cost of selling the policy;
- Cost of administering the policy; and
- Capital for solvency requirements to ensure adequate funds so claims can be paid
Click here for detailed presentations about how health insurance premiums are determined.
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Washington, DC – America’s Health Insurance Plans’ (AHIP) President and CEO Karen Ignagni released the following statement on the report released today by the Department of Health and Human Services (HHS): “The new law will expand coverage to millions of Americans, but fails to address the health care cost crisis. Reducing health care cost growth is one of the most important economic challenges facing the nation.
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01/28/2011
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02/18/2010