Part 3: Problems With Private Insurance

Did someone say health care reform?
Most people in the U.S. have health insurance through their employer, which means they may not know how much the costs of private insurance plans have been rising. From 1988 to 2006, health insurance premiums grew at three times the rate of inflation; workers' wages grew at the same rate as inflation [source: Clifton]. While workers may pay the price in terms of lower raises, that extra money is, of course, someone's bottom line. American insurance companies are the only ones in the industrialized world that are allowed to operate at a profit for providing basic care [source: Reid].

Perhaps for that reason, in the current debate on health care reform, insurance companies are shouldering much of the blame for pocketing profits while citizens suffer. Many of the changes in the current health care reform proposals are aimed at reforming private insurance. These changes include a set of consumer protections that ensure that providers can't deny coverage or charge higher premiums to individuals based on pre-existing conditions or stop covering paying customers once they get sick.

The current proposals also hope to stimulate competition in the private insurance market, perhaps by providing a government-run public option that would allow more people and small businesses to obtain affordable coverage. Covering the uninsured could have benefits for those already covered: One think tank estimated that families pay an extra $1,100 in premiums and individuals pay an extra $410 each year because providers shift the costs of treating the uninsured to the insured [source: Kingsbury].

Lastly, the current health care reform proposals aim to curb unwarranted spending by incentivizing bundled care, in which doctors are paid for results, not for the list of procedures they performed to obtain results. The proposals also include incentives for preventive care; it's possible that health care spending will drop as diseases are caught and treated earlier.
It's impossible to tell right now what the final plan for health care reform will include. But President Obama has vowed to sign a reform bill by the end of 2009 so that U.S. citizens see more health care value for their dollar. It's not a perfect solution but is going to help.