There are some big changes being made to the healthcare system in the United States. Most of these changes will affect how much health insurance companies will collect annually. However, in the past three years health insurance companies have seen huge profits in certain aspects of health care.
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According to the New York Times most of the increase in health insurance spending has come from Medicaid enrollment. In 2010 the spending for Medicaid among the elderly and disabled grew by about five percent.
What are the factors contributing to the growth in health insurance company’s profits?
There are several reasons for the growth in health insurance profits. Many people are more aware of the costs of their health insurance. Therefore, they aren’t going to the doctor’s office unless they have a real medical emergency.
Because of this, health insurance companies aren’t paying out as much for benefits. There are many people who switched to new health insurance plans, choosing to pay for plans with lower premiums. Usually when there are lower premiums involved the copayments and deductibles are higher.
Because of changes in employer health insurance benefits and coverage, many U.S. citizens don’t want to pay out the additional health care costs or can’t afford them. Deductibles are increasing, and so are copayments for employees. This makes it more cost effective to delay health care than to take on the added costs of the health insurance.
How is the new health care law affecting health insurance companies already?
There are many changes since President Obama signed the new health care law two years ago. Now there are financial incentives for both health insurance companies and health care providers. For instance, any health care provider who improves the quality of care for their patients and saves money for the insurance company will be rewarded by the insurance companies through special programs.
Because of this, health clinics inside large chain stores are growing at a fast pace. According to a report done by Merchant Medicine the number of retail clinics has exploded in 2011 in comparison to 2009 and 2010. Big name companies such as Walmart, CVS and Safeway are all working to become players in this up and coming industry.
The big reason behind this boom in health clinics in retail stores is the less expensive rates of treatment. In clinics, many of the professionals are advanced degree nurse practitioners. Nurse practitioners can offer many of the services of a doctor’s office, but with a smaller price tag. The goal for opening these types of clinics is to give those who are insured the most quality care without the extra expenses.
How are clients of health insurance companies changing their spending?
Those who are insured are looking into the cost of their health insurance plans more carefully. With unemployment rates dropping and employers offering less health insurance benefits, people are taking a harder look at their needs for medical attention.
Many are focusing on the out of pocket expenses which certain medical treatments or preventative care incur. Yearly physicals, colonoscopies and mammograms can cost the patient anywhere from $300 – $700. Because of this, many people are postponing these preventative health tests.
Many people who in the past insisted on only using name brand prescription drugs are changing over to generic brand. The cost savings in doing that is tremendous and more and more people are recognizing this.
Not only are people looking into cutting costs by skipping important yearly tests and asking for generic prescriptions, there are those who are being a little more cautious with their medical needs. For example, because the cost of copayments and health insurance deductibles has increased many people have seen their out of pocket expenses increase. People aren’t asking for unnecessary testing for simple ailments such as stomach pain or migraine headaches.
With the new health care plans taking effect in 2014, there are many changes in both the health insurance companies and those who are insured. While people are currently being more cautious with their medical needs, whether or not it will stay this way is still up in the air. Health insurance companies are making huge profits but are still raising their premiums in order to better prepare themselves for the changes to come.
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