Taylor Swift is an American singer-songwriter, and undoubtedly, one of the most popular artists of the decade. She’s won 10 Grammys, a record 23 Billboard Music Awards, and is one of the best-selling musicians in history. More than just a pop sensation who came along with the right look at the right time, her talents have landed her in the Songwriters Hall of Fame and on Rolling Stone’s list of 100 Greatest Songwriters. Oh, and she’s a decorated philanthropist who routinely donates hundreds of thousands of dollars to worthwhile causes.
Yet, despite all of the accolades and good deeds, Swift can’t escape her “Reputation” for boyfriend hopping or getting mired in “Bad Blood” with music icons like Kanye West and Katy Perry.
When it comes to negative press overshadowing good intentions, health plans can relate.
Over the years, insurers have gotten a bad rap for the rising cost of health care. That’s because price increases are often reflected in the cost you pay for health insurance. Recently, state regulators announced health insurers across New York submitted rate requests averaging 12.1 percent on the individual market (CDPHP requested 5.1 percent) and 7.5 percent on the small group side (CDPHP requested 6.7 percent). Now, it’s normal to want to blame the big, bad insurance company. After all, we’re the ones sending the bills. But it’s important to understand that insurance premiums are nothing more than a reflection of the rising cost of care.
According to the Milliman Medical Index, health care costs for a family of four will top $28,000 this year. That’s compared to $18,000 in 2010. The report goes on to say that health care costs for a family of four have been going up – on average – $100 per month for more than a decade! So who’s to blame?
Taylor, we feel you.
The U.S. Government and Accountability Office says pharmaceutical and biotechnology sales revenue rose from $534 billion in 2006 to $775 billion in 2015. That’s more than $200 billion in less than 10 years! At the same time, two-thirds of drugmakers saw their profits rise nearly 20 percent. Today, pharmaceutical costs account for 22 percent of all health care spending. Drugmakers will argue that these price hikes are the result of innovation, but it’s important to acknowledge that Big Pharma makes money when you’re sick.
Speaking of making money off sick people, when is the last time you got a look at a hospital bill? Rising hospital costs – fueled by the effects of consolidation – are another top contributor to higher insurance premiums. In fact, for every dollar you spend on health insurance, 34 cents goes directly to hospitals. While the Capital Region is blessed to be home to some of the best medical facilities in the country, it’s worth noting that hospitals do best when you’re at your worst.
That’s 56 cents of every dollar you spend on health insurance – just to Big Pharma and hospitals!
Which brings me back to health plans. Over the next couple months, state regulators will pour over rate requests and determine what they believe is reasonable to charge. But it’s important for consumers to understand that our rates are merely a reflection of health care’s underlying costs, and even though we’ve gotten a bad rap, our not-for-profit business model succeeds when you are at your best. We’ll continue striving to keep you healthy. And as for the criticism, all we can do is “Shake it Off.”