FinancePolicy & Law

Why Health Insurance Is So Expensive

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Healthcare spending in the U.S. has been growing relentlessly over the last decades, becoming one of the major contributors to the nation’s long-term fiscal deficit. In 2011 alone, the U.S. spent 2.7 trillion dollars on healthcare, amounting to almost one-fifth of the total economy. Even more alarming is the fact that healthcare spending is growing 1.5 times faster than the country’s GDP. So, what are the reasons for the exorbitant rise in healthcare costs?

According to the following infographic, the seven most significant causes for increasing healthcare costs are:

Healthcare spending in the U.S. has been growing relentlessly over the last decades, becoming one of the major contributors to the nation’s long-term fiscal deficit. In 2011 alone, the U.S. spent 2.7 trillion dollars on healthcare, amounting to almost one-fifth of the total economy. Even more alarming is the fact that healthcare spending is growing 1.5 times faster than the country’s GDP. So, what are the reasons for the exorbitant rise in healthcare costs?

According to the following infographic, the seven most significant causes for increasing healthcare costs are:

  1. New medical technology
  2. Provider price inflation
  3. Low primary care use
  4. High spending on specialists
  5. Aging population
  6. Increase of chronic illnesses
  7. Fraud

These factors are responsible for driving health insurance premiums up remarkably. For a more detailed description of these factors and concrete examples of how they affect premiums, view the infographic below.

Health Insurance questionsSource: Carrington

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