More on why health insurance costs so much in U.S.

BY IRENE C. CARD and BETSY CHANDLER

NEWJERSEYNEWSROOM.COM

YOUR HEALTH INSURANCE

In my previous column I shared with you the role that technology plays in driving up the cost of health insurance (and also saving many lives). Likewise, lifestyle choices such as obesity, not exercising and smoking cost $297 billion dollars a year. If we can eliminate the fat, the smoking and get out and walk, just think how eliminating $297 billion a year in claims will reduce premium! These lifestyle choices put us at risk for a multitude of chronic conditions and diseases, including diabetes, cardiovascular disease, stroke, cancers, back problems, kidney disease, knee and hip problems, lung problems, just to name a few. From 1997 to 2005, chronic conditions associated with overweight and obesity has grown by more than 180 percent. From 1997 to 2005, chronic conditions associated with overweight and obesity has grown by more than 180 percent. We can choose to eliminate many of these problems by losing weight, exercising and if you are a smoker, by quitting! Controlling these health care costs is a challenge that can be met. We must become more effective health care consumers.

An aging population, cost-shifting associated with certain government sponsored programs such as Medicaid and the uninsured; prescription drug costs and fraud and abuse in the health care system also play a major role in driving up health care costs. By 2030, the number of Americans 65 or older will more than double to 71 million people. Ten percent of all health care costs are attributed to the use of prescription drugs and almost three percent, or $68 billion, is lost to health care fraud each year.

The question of how an aging population contributes to increased health care spending is an easy one to answer. As Americans age, we use more medical resources. Older Americans account for 50 percent of physician visits and 50 percent of hospital stays. Of interest is the fact that in the coming years, these costs will be further exacerbated as baby boomers, whose health care spending is more than double that of younger adults, get older. Some scholars theorize that as baby boomers age, they think they are still young — a mentality that leads to increased use of new medical technologies, and a demand for all of the latest bells and whistles. The longer we live, the more likely it is that something we had treated in our 40s or 50s will require more care as we age.

On a brighter note, over the last 10 years, the biggest change in health care spending has been the significant reduction in prescription drug costs. The trend toward using more generic medications has had a positive impact on this statistic.

Lastly, fraud and abuse in our healthcare system is widespread. In 2008, an investigations company specializing in this type of work recovered nearly $52 million resulting from fraud, abuse and waste. Since 2004, this company has recovered more than $192 million and referred 325 cases to law enforcement and regulatory authorities. We should always be on the lookout for fraud and abuse and report it to our insurance carrier if we suspect this.

There is no easy answer to solving the health care crisis. The health insurance industry acknowledges that our health care system must change and the national Blue Cross Blue Shield Association is focused on initiatives to reduce the cost of health care services. They recognize that Americans want and need a delivery system that can provide affordable, high-quality coverage for all Americans.

Much of the information in this column, like last week's column, was taken from a document produced by Independence Blue Cross entitled, "Why does Health Insurance Cost So Much?" I hope you have found this as interesting and eye-opening as I have.

Irene Card & Betsy Chandler are licensed insurance professionals working at MIC Insurance Services, a health insurance services company. If you have questions relative to this column or other related topics, we invite you to call (973) 492-2828, or visit our web site at www.micinsurance.com.