The Cost of Insurance Is Outpacing The Rise In Salary

The Cost of Insurance Is Outpacing The Rise In Salary

When former US President Obama launched Obamacare many Americans had hoped that it would be the solution to give all access to cheap healthcare. Things have not worked out as expected though and although many good things have come from the policy it is not achieving what it was set out to do. New President Trump wants to abolish it completely but the ulterior option he put forward was not good enough and was rejected.

  • Who Does It Affect Most?

If you are self-employed or work on a freelance basis, the rise in insurance policies will have affected you the most. Those who work for big organizations have not seen a big increase in the prices since the companies they work for have had to pick up the extra costs.

  • Why Are Insurance Premiums Rising?

When Obamacare created the Government and healthcare industry team to try to create a policy that would cover all Americans. Normally when a government and private organization get together things do not normally turn out well. They over promise and under delivering each time and this situation is now different.

To work out the cost of setting health insurance policies the companies go to great lengths analyzing all the available data to be able to estimate the costs involved. For Obamacare the insurance companies estimated the costs to cover those Americans that were not covered but got the figures wrong. Due to this companies have lost an estimated $2.7 billion because the estimates of the total amount of claims made were completely wrong and lots more people than expected used the insurance.

To make accurate estimates in the healthcare sector is extremely hard due to a relatively small total of people costing around 49% of total expenditure. Those who have an extremely bad disease, illness or conditions are by far the biggest costs and the unequal cost distribution makes calculating estimates hard.

Now that data is available for Obamacare it means that insurance companies can make better estimates of the costs involved so they can set the correct prices. It means that insurance premiums will be going up as the original estimates were completely incorrect and demand was far greater.

The cost of treatments over the last 20 years has continued to go up and not down. Doctors and Nurses wages all go up above inflation, investment is required in the latest technology, upgrades and more go up each year. The only way that insurance companies can make sure they make money is to follow and increase their prices accordingly.


Obamacare has been heavily criticized but it has managed to do a number of great things. It has saved countless lives of Americans who would not have had health care if it was not for the policy. Hopefully, an agreement can be reached to help reduce the cost of healthcare, insurance and made available to all. If not then it will be everyone for themselves and only the rich will get the care they need.

Thanks for reading………

Author: John Hawthorne

John Hawthorne is a health nut from Canada with a passion for travel and taking part in humanitarian efforts. His writing not only solves a creative need it has also lead to many new opportunities when traveling abroad. To see more from John check out his latest post home equity loans.

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