But heres a surprise....spending in healthcare has decreased. That suggests that a lot of people are losing their insurance and not going to the doctor or getting medical treatment.
Back in 1970s, the United States looked a lot like other countries when it came to health care spending. In 1980, we spent $1,110 per person on health care, which worked out to about 9.2 percent of Gross Domestic Product. But in the 1980s, health-care costs in the United States began growing much faster than in other countries, rising to $8,402 per person in 2010. That amounts to a total of $2.54 billion spent on health care, or 17.9 percent of our total economy.
/ Source: Kaiser Family Foundation
Insurance companies need a large pool of people in order to spread the risk and keep the cost of insurance premiums low. The more people in the pool the lower the cost of insurance premiums. So if health care costs have more or less stabilized and yet insurance rates are going up then that suggests that less people are buying health insurance and going to the doctor because they can't afford it. So they wait until they are very sick to seek medical attention which actually costs a lot more than if they had been treated earlier. So who picks up the tab? The people who have insurance do because health care providers transfer the cost of the uninsured onto private insurers who in turn raise their rates on the insured.
Three key factors drive up health care costs. There's how much each unit of health care cost. There's population growth: the total number of people who need health care can increase. And there's utilization: The amount of health care each person uses can increase. In 2010, the cost of health care grew at about the same rate that it has for the past decade. So did the growth of the population. What's driving our slowdown in health care costs is a drop in utilization: Americans are using pretty much the same amount of health care as they did last year.
That's a big change from the past decade, where we increasingly used more and more health care.
/ Source: Center for Medicare and Medicaid Services
I would be curious to know if your insurance company published the reason for raising the cost of your insurance."...Beginning this month (September 1, 2011) insurance companies must publish and justify all proposed premium hikes of 10% or more for the individual and small group markets, and state insurance departments must review them......