It has become common for the Affordable Care Act to be blamed for rising health insurance costs in the U.S., but the federal law may not actually be the problem. According to a new analysis from the Commonwealth Fund, an organization that conducts independent research on health policy, the Affordable Care Act actually has a relatively modest impact on insurance costs. The organization has analyzed the reasons that insurance companies provide to regulators when they are seeking rate increases of 10% or more and have found what may be the cause of rising insurance premiums.
Medical costs are cited as a primary reason for higher rates
According to the Commonwealth Fund, the growing costs associated with medical care are actually to blame for growing health insurance costs. Medical care is becoming more expensive for a variety of reasons. Among these reasons is the use of new technologies and medications that are expensive to produce. Hospitals, as businesses, have to manage the financial impact associated with the acquisition and usage of these technologies and medications, while also paying doctors and other staff. As such, hospitals have been playing a powerful role in the rising costs of medical care.
Medical care is becoming too costly
Throughout most of the U.S., insurers have to seek out approval from either state or federal regulators before they can raise premiums by 10% or more. According to the Commonwealth Fund, the primary reason behind significant rate hikes has to do with medical care and its high price tag. Of the rate increase proposals that researchers examined, less than half cited the provisions of the Affordable Care Act as the reason for higher premiums being necessary.
Insurers seek resolution from federal lawmakers
Rate increases throughout the U.S. are generally approved by state or federal regulators. This is partly due to the fact that rate increase proposals are found to be necessary due to the growing costs of medical care. Insurers have been pressuring federal lawmakers to address the issue of medical costs and the rate at which they are growing, but no legislative action is expected to be taken on the matter in the foreseeable future.
