Why Ohio Health Costs Are Rising

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					             Why Ohio Health Care Costs Are Rising
Ohio health insurance premiums are rising. This is mainly due to increasing health
care costs. It’s important to understand the factors that contribute to rising costs of
health care. Controlling these factors can help to slow down the rise in premiums.

Ohio health insurance premiums are rising, even for those who do not use a lot of
health care services. According to a survey conducted by Kaiser Family Foundation
and the Health Research & Educational Trust, premiums have increased nationally by
97% in less than a decade, about three times as fast as wages and inflation.

This is a worrying trend because more Ohioans are looking to purchase coverage to
meet the requirements of the Individual Mandate. Moreover, spending more on
health insurance would mean having less to spend on essentials like food and
gasoline. Understanding and controlling the factors that contribute to rising costs of
health care can help slow down the rise in premiums to some extent.

Factors Contributing to Increased Expenses on Health Care

Ohio health insurance companies fix premiums based on age, location, and the costs
to pay for members’ claims. According to leading health insurer Anthem Blue Cross
Blue Shield, 87% of premiums are used to pay for medical services and products,
10% goes to cover administrative costs, and 3% to health insurer profits. It is the
costs to pay for the claims of the insured that are going up and causing Ohio health
insurance premiums to increase. Here are the main reasons why health care costs
keep rising:

   •   Use of advanced medical technology: The more frequent use of costly
       technology and high-tech procedures is one of the main reasons for the rise in
       health care expenditure. While some procedures or lab tests may be
       necessary and improve the quality of care, others are not. Ohio health
       insurance claims for new, advanced procedures are naturally higher.

   •   Increasing use of prescription drugs: It is estimated that about two-
       thirds of Americans fill in a prescription every year. Prescription drugs are
       costly. The use of prescription drugs is increasing among Ohio adults with
       drug coverage. Though generic equivalents cost less, they take time to come
       into the market.

   •   Detrimental lifestyles: Chronic diseases are responsible for up to 75% of
       the yearly expenditure on health care in the U.S. Many Ohioans lead
       unhealthy lifestyles which contribute to problems such as obesity and heart
       disease, raising the burden on the health care system. The U.S. Centers for
       Disease Control reported that in 2011, up to 29. 6 percent of Ohioans were
       obese. According to a recent study, up to 59.8 of Ohio’s adult population
       could be obese by 2030.

   •   Repeat tests and unnecessary healthcare services: A new study by the
       Dartmouth Institute for Health Policy and Clinical Practice shows that many
       Medicare beneficiaries are subject to repeat medical tests, leading to over-
       diagnosis and unnecessary treatment. Such repeat tests and unwarranted use
       of healthcare services including emergency rooms are driving up healthcare
   •   Health insurance fraud: Instances of Ohio health insurance fraud include
       inflating claims, submitting wrong facts in order to obtain insurance coverage
       or lower premiums, submitting false claims, or filing claims for health care
       services not received. Health insurance fraud ruins the victim financially.
       When insurer costs increase, it results in rising health care premiums for

   •   Costs of compliance with laws by Ohio health insurance companies:
       Anthem reports that private health insurers in the U.S. spend about $339
       billion a year to comply with federal rules and regulations. These expenses
       are for screenings, filing, and reporting. Insurers raise premiums to factor in
       these costs.

   •   Cost shifting: Medicaid and Medicare rates are lower than those offered by
       private insurers. Lower coverage by these public programs result in shifting of
       health care costs to private insurers. This raises premiums for individuals and
       employers who rely on private insurers to pay for their medical expenses.

Role of Health Reform and Ohio Health Insurance Companies

Health reform aims to control health insurance costs. Ohio will soon have a federally-
run health insurance exchange where individuals and small businesses can purchase
affordable coverage. Health care law has provisions aimed at checking insurance
fraud, patient outcome-based reimbursement for physicians, and more.

Ohio health insurance carriers such as Anthem are working to help members save
expenses on care by helping them get discounts from service providers, encouraging
use of generic drugs, encouraging healthier life styles, and fighting fraud. Insurers
are also striving to reduce their own costs so that they can provide health insurance
Ohio at more cost-effective rates.

The best way to find affordable health insurance in Ohio is by getting professional
advice from a licensed, experienced insurance brokerage. They can help compare
and carefully review your Ohio health insurance options.

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