Global Health Insurance Price Modifiers

So what is the cause behind the cost of health insurance in the United States? There are many different factors that determine how much of a premium you must pay for coverage. These factors can be broken down into two major categories, the global insurance modifiers, which are generally beyond your control, and are forces that act on a national, political scale, and local insurance modifiers which are issues that generally you can control. On this page we will talk about some of the global insurance price modifiers in the United States and what you may be able to do to influence these modifiers.

Tort Claims and Reform

The laws of the United States allow for a victim of malpractice to sue a doctor and possibly the hospital he works at, not only to recover any damage from actual pain and suffering and perhaps loss of work, but also in a punitive sense which can cost an insurance company for that doctor or hospital hundreds of millions of dollars. Far from being free or irrelevant you, every cent of that damage award will find its way into the premiums of health insurance customers across the country. Tort reform - limiting the ability for judges and juries to award massive damages for medical malpractice, is a hot-button issue that your congressperson must deal with.

Research & Development

The United States is the - not A - The World Leader in developing new drugs and treatment techniques for medical procedures that are used around the world. Billions - trillions of dollars are spent on a regular basis coming up with the most technologically advanced and safe ways to manage healthcare for men, women and children the world over. Researching new drugs and treatments, however, is not an easy proposition, often the research is hit and miss and a company may spend hundreds of millions of dollars on a project or concept that ends in failure or the inability to get FDA approval. In addition, once a new treatment is developed, a company must pay for the testing of such drugs, then the paperwork filings for the government, and finally the drug must be advertised and sold - and the company will have exclusive rights to sell the drug only for a certain number of years before the formula must be made available for a generic equivalent. All of this factors in to make prescription drugs extremely expensive in the United States.

Government Regulation

There are laws on both the federal and state levels that determine how health insurance companies are allowed to operate and where they may compete. One of the laws that absolutely affects price is one that insists on different plans for different people in different states. This means that even across state lines, Aetna, or PacifiCare or Blue Cross may not offer the exact same plan to you in a portable fashion. If you are on a Blue Cross plan, in Vermont, for example, and move to neighboring New Hampshire, which also has Blue Cross, you will have to change plans to one of those (similar) that is offered in your new state. This kind of regulation increases costs for insurance companies which is then passed on to consumers.