Health insurance companies make record profits as costs soar in the United States

(CNN) — As Americans spend more and more of their income to pay for their health insurance’s rising premiums and deductibles, major insurance companies are raking in record profits.

As inflation and pandemic-related challenges weigh on Americans’ wallets, health care costs continue to rise.

“It doesn’t cover 100% until we hit $12,000 out of pocket,” Jessica Jones said.

For Jones and his family, it’s devastating with his son struggling with chronic heart disease.

“By making choices, are we going to pay this medical bill? Are we gonna keep the lights on? My husband and I had divorce conversations so we could get Medicaid for our son,” she said.

According to the Kaiser Family Foundation, the price of an employer-sponsored family policy has risen 47% since 2011, outpacing wages and inflation, meaning premiums and deductibles now eat up more of the average family income – 11.6% in 2020.

A December poll found that 46% of insured adults are struggling to afford the costs and 29% have not taken prescribed drugs because they are too expensive.

Food prices continue to rise and Americans are feeling it in their pocketbooks. (Source: CNN, KDKA, WLFI, KCAL, KABC, KMIR, KULR, GENERAL MILLS, GETTY IMAGES)

“They have health insurance, but they still can’t afford the health care they need,” said Erin Bradshaw, chief mission delivery officer at the Patient Advocate Foundation.

Yet health insurance companies are making record profits.

For UnitedHealth, the largest insurer in the United States, net profit has jumped since 2015, reaching $17.7 billion last year, as its business quickly expanded into other health sectors.

“(Companies) aren’t reducing the cost of care and relieving people of bonuses and pockets, but enriching their shareholders and senior executives,” said Wendell Potter, president of Business Leaders for Health Care Transformation.

The Affordable Care Act includes a rule that insurance companies must spend at least 80% of money from premiums on health care costs and improvements.

The remaining 20% ​​can go to administration, marketing and profits.

Last year, UnitedHealth returned more than $5 billion in dividends to shareholders, and other companies followed suit.

“But if you want to talk about the drivers and why deductibles are going up, health insurance company profits, they’re a part of it, but a very small part of it,” said Matthew Borsch, managing director of BMO Capital. Markets.

It’s part of a wider debate over healthcare spending, which has skyrocketed in recent years.

Prices set by providers such as hospitals, doctors and pharmaceutical companies are rising even as fewer Americans have had access to medical services during the pandemic.

Administrative costs alone account for more than a quarter of health care spending in the United States.

“For-profit companies are playing an increasingly important role in the American healthcare system,” Borsch said.

It’s a complex question, but for Jones it’s simple: “If the cost goes up, we can lose everything at this point. »

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Kristan F. Talley