California Hospitals: Compare Health Insurance Rising Costs

In “California’s higher hospital costs add to health insurance hikes,” Bobby Caina Calvan and Phillip Reese of The Sacramento Bee try to compare health insurance costs and the reasons they keep rising.  While the general public and even the government can be quick to blame insurance companies for everything, the authors’ research showed that hospitals collected $25 billion from health insurance companies from September 2008 to October 2009.  Since 2005, that number increased by over one-third.  A lot of the charges to insurance companies, which flow directly to consumers, come from expenses like hospital expansions, new technology, and services for the uninsured.  It was found that some hospitals actually charged more than double what the service provided actually cost.

Insurers like Golden Rule Health Insurance are essentially held hostage by the charges from hospitals yet take most of the blame for increasing premiums to consumers.  Hospitals in California are required to report the amount they spend on caring for insured patients, the amount they charge insurance companies, and the amount that they actually collect.  The hospitals reported a 53% increase from the amount they spent on care to the amount they charged.  Unfortunately, hospitals are in their own predicament with costs which is why they have to pass them along somewhere.  Government mandates to make hospital improvements, provide care to uninsured Americans and illegal aliens, and reimbursements for Medicare and Medi-Cal that are less than cost force that money to be made up for somewhere.  Unfortunately for consumers, these cost increases for insurance companies usually lead to increased premiums.

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