The Insurance Racket

Illinois wins the "screwed by insurance companies" prize over California.  You thought those 39% Wellpoint hikes were bad?  The Land of Lincoln is looking at up to a 60% hike in individual insurance premiums this year.

For the state's more than half-million consumers in individual health plans, base rates will go up from 8.5 percent to more than 60 percent, according to state data. Base rates do not take into consideration health status, gender, age, place of residence and length of a policy -- all factors that could raise premiums further.

The individual insurance market is relatively small compared with consumers who get their insurance through their employers, but it has become the fastest-growing group in this economy, in which about one in 10 are unemployed. The individual market also has spawned a national debate after a California health insurer raised premiums for this group by up to 40 percent, triggering probes by state regulators and the Obama administration.

In an effort to help consumers know more about insurance rate increases, Illinois is putting the individual rate data online for the first time starting Thursday. The state does not receive information on small or large group health insurance rates or premium changes.

"This information is important because the individual market is where an increasing number of people fall when they lose their jobs and become unemployed," said Illinois Director of Insurance Michael McRaith. "Individuals need insurance more and more, and they are struggling to hang onto it now more than ever. Because fewer people are employed and fewer employers are offering health insurance, we would expect to see increased applications for individual health insurance."

As Steven D points out however, most of that is plain old profiteering.

From 2000 to 2008, insurance premiums went up 97% for families and 90% for individuals. In the same time period, payments to providers like hospitals and doctors only went up 72%. Even worse, underlying medical inflation, calculated from the Consumer Price Index, went up only 39%. 

In short, over the last eight years premiums almost doubled, but medical inflation went up only 40%. Premiums rose two times faster, and over three times faster than wages, which only rose 29% in the same time period.

Your insurance pretty much doubled from just ten years ago, folks.  Unless health care reform passes, it will more than double again in another ten years.  Your choice, America.