Daniel Lee has a story in the Indy Star citing industry experts who expect health insurance premiums to rise 10 to 15% locally this year. Forget property tax increases, this is the increase that should have people protesting in the streets. You can move to a cheaper property. Getting into a less expensive body is more problematic, and the health insurance increases have been going on for a long time now. Maybe it’s a frog in the pan phenomenon. The property tax increases have been mostly all at once. The health insurance increases have been more gradual. The article cites smoking, obesity, and the hospital boom in central Indiana for the local increases. I’m getting to the point where I have the same reaction to health insurance execs citing obesity for premium increases as I do when oil execs cite pipeline disturbances for price increases — there is a chance they’re telling the truth, but I can’t escape the nagging suspicion that there is a top executive out there angling for a way to add a couple million to his take home pay. (Think of the property tax outrage if Governor Daniels or Mayor Peterson had a 7 or 8 digit salary and was contemplating raising property taxes by 10% per year.)
For employment based health plans, the article also points to a trend toward looking into employee lifestyles – smoking, eating, exercise habits; and charging more to those who choose poorly. I have mixed feelings on this trend. It seems to make a fair amount of sense for those actions one can truly choose yeah or nay on. But how about when the insurers start charging you extra based on your genetic makeup? And this assumes that the insurer is going to administer these categories fairly. I can see paper pushers in the insurance bureaucracy getting incentives for “mistakenly” putting more folks into the higher risk categories.
I guess a fair amount of my negativity comes from the lack of transparency of the health insurance industry and my general lack of trust in the motives of those who run it. Under normal circumstances, you don’t have to trust the motives of an actor in a market situation — the market tends to correct those who are merely out to screw you. But the health insurance industry is different in that it is so opaque that it is difficult to make meaningful comparisons. Furthermore, given that health care is often times literally a matter of life and death, you don’t always have the option of simply walking away from the market as is the case with other products. Like one person interviewed for Mr. Lee’s article said, “the system is broken.”