The costs of health care are on the rise, putting heavy financial strain on insurance companies which, in turn, translates into higher premiums for consumers. While arguments regarding the cause of rising health care rates abound, the real reason for the phenomenon may be something that is impossible to control. The so-called baby boomers generation is steadily aging, with many reaching the twilight years of life. With age comes a sleuth of new medical concerns ranging from cancer to dementia. While older generations have been dealing with such troubles for decades, the insurance industry has never faced such gargantuan number of people in need of expensive medical care.
Employers are beginning to feel the strain as the rates for their employee’s health benefits begin to soar. Such is the case with Port of Subs, an expansive sandwich franchise based in Reno, Nevada. The company’s premiums are set to climb 33% in 2012 despite that fact that the company is paying higher deductibles this year. The higher costs may lie with an aging populace, but age is likely only part of the problem.
Aging baby boomers with health conditions may be adding to the financial pressures faced by insurance companies and consumers, but technology could be playing a similar role. As medical technology advances, the use of this technology becomes more expensive. According to a study from the Kaiser Family Foundation published in 2007, the wealthiest nations in the world pay much more for medical technologies, with many laboring under the premise that better technology means better care.
While consumers are certainly feeling the weight of higher insurance rates, insurers are feeling the pressure of the rampant growth of expenses associated with medical care. Despite efforts from the insurance industry to stem this growth, the factors powering higher costs may be beyond control.