Little-Known Factors in the Rising Cost of Health Insurance

There is no question that the cost of healthcare and health insurance in the United States is rising year after year, but unfortunately, few people really understand the reasons behind those rising costs.

Rising Cost of Health Insurance 22b22While many people mistakenly believe that doctors and other providers are seeking higher incomes, that isn’t true at all! In fact, the rise in medical services costs are not really in keeping with the rising cost of insurance! So then, why is health insurance getting more and more expensive year after year? Here are some of the leading factors you were probably never aware of!


One of the big issues today’s insurers face is overpayments, which are causing huge losses for them. Many of these overpayments have gone undetected in the past, but in today’s hi-tech environment, there are solutions to this growing concern.

Specialists in the field of healthcare financial technology such as FRG have software platforms that can collect, analyze, and automate many processes. Once data is collected and analyzed, a health insurance provider just might realize that the number of services paid for is inconsistent with the size and type of provider billing for payment.

Here, it pays to keep a knowledgeable healthcare claims auditor on staff so that questionable payments can be assessed and recovered. Fraud is only one underlying reason for overpayment of services with human error in the billing process equally, if not more, at fault. In an effort to balance the losses these overpayments caused, insurers are raising rates. Doesn’t it make more sense to keep premiums low by recovering those losses?

Local, State and Federal Government Legislation

There are so many rules, regulations, and laws on the books that it would take the average person a lifetime to sort through. Not only are healthcare insurance providers subject to federal laws but each state has industry-specific laws on the books as well! Then there may be some local regulations that impact the cost of health insurance in terms of what can and can’t be billed as a service in that particular area.

A good read on the ways in which government regulations impact the cost of health insurance can be found in this article. Information goes back to the 1960s and 1970s when the cost of healthcare and health insurance began skyrocketing.

From the days of Richard Nixon to current administrations, this article traces the evolution of government intervention and how those regulations can, and do, impact the cost of coverage.

If you notice growing costs for your company or your individual policies, it pays to understand why those costs keep rising. Don’t attribute it to greed among healthcare providers because often they are getting paid less than those services should be collecting.

Remember, doctors are paying more than ever before for med school and often their loans are equivalent to years of being in practice! Greed isn’t at the heart of today’s cost-related insurance woes, so leave those thoughts behind. Overpayments and government regulations are really of great concern. That is what you probably never knew.


Interesting related article: “What is Insurance?”