How The Health Insurance Industry Fights the High Costs of Medical Care

With an average price tag of $36,000 for every American to pay out of pocket for medical services, the health insurance industry is a necessary evil that many people wrestle with. However, what many people might not be aware of is the sneaky tactics this industry employs in order to keep medical prices high and profits flowing. It's important for consumers to be aware of these tactics so that they can better protect themselves against being taken advantage of and have some control over their health care costs.

There are a number of different ways that health insurers try to limit patients' ability to make intelligent purchasing decisions regarding their treatment options and in turn keep profits up. One of the biggest ways that the industry does this is by keeping a monopoly on health care. Our current health care system essentially supports a medical monopoly by requiring that everyone buy insurance from private companies. This rule is established under the Affordable Care Act and was originally enacted as part of an effort to reduce government spending on Medicare and Medicaid.

The problem with this arrangement, however, is that it creates an environment where there is little incentive for insurance companies to negotiate prices with doctors. Instead, they simply pay whatever price is listed in order to receive services from medical professionals. In fact, one survey showed that only 29% of doctors even consider insurance companies in their fee structure; with most doctors instead working off a standard charge for each procedure conducted.

In addition to discouraging competition, the current system also allows health insurance companies to create a monopoly over coverage. The ACA's mandate that all American citizens buy health insurance, which was enacted by the Health Care and Education Reconciliation Act of 2010 (HCERA) is another way that the industry creates this monopolistic environment. This law required individuals who did not have qualifying health care coverage to purchase a qualifying plan with a minimum deductible of $1,200 or less. With this new rule in place and no other alternative offered, many people felt forced into buying health insurance even if they could not afford it.

In addition to these monopolistic tactics, the health insurance industry has also implemented some of their own pricing strategies. One way that they do this is by creating tiers for patients based on their health care needs. For example, there are different types of hospitals and different types of medical professionals that are used in various treatments. These include, surgeons, primary care physicians and more. These different levels set the price ranges for each treatment you may need and can also affect your out of pocket costs for a surgery or hospital stay.

While not a bad idea on its own – having tiered medical care makes it so that people who are in the highest tier are charged significantly more than those in the lowest tier. This practice can be used to make money off of people in need of more extensive procedures or those who are dealing with a chronic issue that requires more attention. An example of this would be someone with diabetes being charged significantly higher premiums than someone who is not diabetic.

Another way that health insurers keep costs high and profits up is by reducing the doctor selection for patients. When you purchase health insurance, you're required to get treatment from certain hospitals and their affiliated doctors. This means that if you want to get treatment for an illness, you might have to go to a hospital or doctor that doesn't specialize in your condition. Not only could this result in a longer wait time for you, but it could also mean that you're not getting the best treatment for your condition.

In order to keep their profit margins high, insurers also have the ability to deny coverage to patients if they are at risk of incurring excessive costs. This means that if you have a pre-existing condition or if you are older, your insurance company might deny your application. This can leave individuals without adequate coverage and then requiring them to pay out of pocket for their treatment options. In addition, it also allows insurance companies to block individuals who they believe will cost too much money because of health problems that they already know about.

The health insurance industry is not without their own hidden tactics on how they keep costs high, but knowing what these methods are is just as important as understanding how to circumvent them. In the end, it's up to consumers to decide if these tactics are acceptable by purchasing health insurance or paying for treatment on their own.

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Health insurance companies are a necessary evil of the current system, and their existence is often justified as a way to provide coverage for those who need but can't afford medical care. The sad fact, however, is that the health insurance industry contributes far more to the rising cost of healthcare than it provides in terms of essential health benefits. In fact, this industry has become so large and powerful that it's beginning to eat away at the very fabric of our society and threaten the financial stability of our nation.

The grim reality about health insurance companies is that they have much more control over your individual health care costs than you think. And while many people believe that their plans are working in their favor, the truth is that most people have absolutely no idea how to control costs or manipulate the system to receive the best health care at a reasonable price.

As a result, it's clear that this industry is ripe with fraud and abuse and has become nothing more than a tool for insurance companies to line their pockets and increase their profit margins. Below we will go over some of these tactics in more detail so that you can learn how they work and how you can protect yourself from becoming a victim of this greedy industry.

1. They Undervalue Your Health Needs

The first thing that an insurance company does when they set up a policy with you is determine how much money they are going to pay for all of the various procedures and services that you will need in the future. This is called your "actuarial value" and it represents the maximum amount of money that insurance companies are going to pay out for all your medical needs. The only way they can provide this amount of money is by inflating their estimated costs, which usually means undervaluing your health care needs in order to make more profit off of you.

For example, let's say that your insurance company is going to pay $20,000 for all of your health care needs and treatment. If they estimate that a surgery will cost $25,000 and they only want to spend $20,000 on it, then they will either deny coverage completely or they will offer you a "discount" of the remaining $5,000 as an incentive to accept their low ball offer. Of course, this is just an example and the numbers used are probably much higher than what you'd see in reality.

Conclusion: Because your policy is the one that sets your health care costs and limits, it's important to understand that you are in control over how much money you spend on health care costs. This means that you should always do everything in your power to get the services and treatments that you need; even if it means bypassing the advice of their staff or trying alternative methods of treatment.

2. They Inflate Premiums & Charges

The second thing that an insurance company will do is fix charges and premiums at a level that they can easily afford while still making a large profit. For example, let's say a monthly premium of $400 is just above what a family can comfortably afford for their health insurance plan.