A. Simply explained, health care insurance premiums are based on:

  • The price/cost of healthcare services, drugs, and medical devices
  • The “number of” (“or acceleration growth of”) of healthcare services, drugs, and medical devices
  • Administrative and risk cost to process and oversee the management of a healthcare program
  • Plan design that allocates cost sharing by the patient, i.e. deductibles, coinsurance, and out-of-pocket limitations

In America, the cost and utilization are increasing every year:

  • Healthcare services, drugs, and medical devices are increasing annually between 6% to 11% per year
  • The number of healthcare services, drugs, and medical devices are increasing 2% to 5% annually due to medical advancements, new “blockbuster” drugs, and medical technology
  • On average, the health status of Americans is eroding due to increasing chronic conditions related to age, obesity, and lifestyle. Many of these chronic conditions are changeable or treatable with diet, exercise, and maintenance medications.