silver points

Nate Silver points out:

The Record Profits Myth strikes again -- I don't like the insurance companies either; I'd gladly get rid of them and replace them with single payer. But the industry's profits are low: only about 3.3%.

So what happens when insurance companies are forced to spend 85-90% of premiums on health care coverage? It’s obvious they aren’t going to let their profits take much more of a hit, so where will they make up the difference?

In 2007, adults with employer coverage faced an average of $729 annually in OOP costs for medical services, including deductibles and other forms of cost sharing such as copayments and coinsurance. That represents a 34 percent increase from 2004, when the average OOP burden was $545. Health plans covered a slightly smaller percentage of overall expenses in 2007 than 2004, but growth in overall health spending was the chief culprit behind rising out-of-pocket costs.

There was a 34% increase in out-of-pocket expenses over 3 years, and this report is almost 3 years old now. I haven’t seen anything in the current legislation to deal with this.

I have been bringing up the fact for months now that Congress isn’t doing anything to curtail costs. Yes the insurance companies are bad, but they aren’t the only ones guilty in this. Let me show a couple of graphs that Ezra Klein pointed out in November: