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Here are a couple myth/facts that I found interesting:
Myth: Higher health care costs are the result of continually rising insurance premiums, inflating the price of health care.
Fact: Because insurance is a means of financing health care, premiums have to track the underlying cost of health care services. Those underlying costs have been rising and insurance premiums have simply kept pace.
Health care costs drive insurance premiums, not the other way around. Over the last decade, health care costs have risen about 7.7 percent a year on average, and insurance premiums have also risen at 7.7 percent. The overall rise in health care costs is a result of higher rates of chronic conditions such as obesity, diabetes and heart disease, more expensive technologies and procedures becoming available, and "cost shifting by the government" that is, doctors and hospitals charge privately insured patients more to offset the losses that come from Medicare/Medicaid underpayments that do not cover costs. In fact, about 11 percent of the average family commercial Preferred Provider Organization (PPO) premium stems from government cost shifting. Other drivers of cost include waste in the system and how providers are reimbursed for delivering health care services; they are paid by procedure, which many believe leads to unnecessary care.
The primary factors responsible for price increases can and should be addressed through health care reform that emphasizes, for example, the importance of wellness and preventive medicine, administrative simplification, investment in health information technology (HIT), emphasis on evidence-based medicine and health delivery payment reform.
Myth: Health care companies reap huge profits and benefit from the status quo.
Fact: The average profit margin of health care companies stands at only 5 percent, lower than many other industries and other players in the health system. It is better for everyone if we get and keep all Americans covered.
While there’s plenty of talk about “insurance company profits,” the truth is that health insurance companies’ five-year average profit margin is about 5.3 percent. That means for every dollar of revenue insurance companies take in, they make about 5 cents in profit. This is significantly less than drug companies (18.4 percent), cigarette manufacturers (13.4 percent) or computer software companies (22.5 percent). Some companies in recent years have paid about as much in taxes as they made in profit.
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