Study Debunks Insurers' Explanation for Exorbitant Rate Hikes

Fingers crossedThe pro-health care reform group Health Care for America Now has released a study (pdf) that contradicts insurance companies' claims that their recent, exorbitant rate hikes were driven by increases in the cost of medical care. The study shows that over the last eight years premiums have almost doubled, while medical inflation only increased by 40 percent. HCAN found that insurance companies are raising their rates more than 20 percent faster than the amount they are paying out to doctors, and twice as fast as their underlying costs of medical care are rising. In short, insurance companies are hiking premium prices much more quickly than their costs are increasing. HCAN also found that insurance companies are spending the extra money on perks. For example, Anthem spent $27 million on 103 executive retreats to locations like Hawaii in 2007 and 2008 alone. From 2000 to 2008, insurance companies spent $716.4 billion of their premium dollars on administrative costs, salaries for their CEOs, and investor profit -- practically enough to fund the entire health reform bill.


Its seems as if insurance companies are willing to do anything to get your money out your wallet. It is so very important for people to realize that rate hikes are not always because of the economy or because the insurance company is taking on new expenses. The job of a company is to maximize expenses by any means necessary. We as the people must hold insurance companies accountable.