Why Maryland Health Insurance Can Be So Expensive

Why is Health Insurance So Expensive?

Over the last few years, the costs of health care have risen sharply. There are many reasons for this. The average age in America is rising. As the baby boomers age, there are more older people with a greater need for health care. Technology has improved, but has also become more expensive. Doctors and hospitals are raising their fees as their costs increase. Advertising has helped stir demand for new prescription drugs, and the new drugs can be much more expensive than drugs already on the market. As health carriers pay more for these treatments, they raise premiums to cover their costs.

Health insurers and HMOs base their premiums, in part, on your age and geographic area. The areas around Baltimore and Washington have different cost factors associated with premiums than areas in Western Maryland or the Eastern Shore. If you have a small employer policy or an individual policy, you may find that your premiums go up sharply when your age or the group's age rises. Insurers and HMOs are not permitted to raise premiums for individuals or for small employers based on the claims of one person or based on the claims of the one employer group.

The role of the Insurance Administration is to make sure that the insurance companies and HMOs charge enough premium to pay claims and remain in business, while also protecting consumers from increases that are too high. Our actuaries carefully review premium increases to make certain that the company can justify the amount of the increase.