Why Is Health Insurance So Expensive?

[The Anonymous Actuary]

It took a lot longer than I thought, but I have finally created a YouTube video titled "Why Is Health Insurance So Expensive?" My first try came out at over 19 minutes. Even if I split this up into separate pieces, I realized it was far too long. So I kept trimming away until I got down to a little under YouTube's 10 minute max. You can find it here:

"Why is Health Insurance So Expensive?" video on YouTube

I decided in this video to be strictly informative. I didn't include evaluative comments or theories. This video is nothing but cold hard facts. But I felt this was important, because I've realized in talking with friends and family that many people are completely out of touch with the real cost of health care.

My next video should be a good bit shorter, but will build upon this one to explain why insurance costs go up so much each year. My hope is that this will be the most powerful one. Everything else in life, it seems, goes up by normal inflation. So why is health insurance such an exception, unless the insurance companies are just milking us all? I plan to post an Excel spreadsheet on my website (once we get it completely updated) so people can check out the numbers for themselves.

I'd appreciate any comments/suggestions. Thanks for all the help so far!

[homeys66]

Nice video. Provides good background to where costs come from, without overwhelming the viewer. I think it was about the right amount of content for a video.

[homeys66]

BTW, you might make a video about the "insurance myth". My rough guess is about 45% of costs are insured by government, about 30% is insured by an employer, and about 25% is insured by an actual insurance company. So why are we focusing on insurance companies and that 25%?

[The Anonymous Actuary]

Thanks, homeys66. I made my poor wife watch the 19+ minute version, and she looked at me several times like, "You really think anybody is going to watch that whole thing?"

I hadn't thought about addressing the "insurance myth." I'm focused on the insurance companies because that's what is attracting all the attention. People "feel the pain" most acutely for that portion that they pay themselves, and that's what is provoking the wrath.

This same rationale is why I think that my next video needs to be, "Why do my health insurance premiums go up so quickly?" The perception in the market is that insurance companies are just gouging the customer because there is supposedly little competition. They're mad, and they want something to be done about this problem. They don't like the rest of health care reform, but they do want insurance premiums to stop skyrocketing. Heck, I do, too! But people need to realize the real reasons for these crazy increases.

[The Anonymous Actuary]

By the way, as folks here visit my YouTube video, please take the time to leave a rating and/or comment on YouTube if you feel comfortable doing so.

Thanks again!

[Hugh Jass]

my question is $271 pmpm is not that bad. You mentioned at the beginning of the video that some people pay 1000's of dollars/month for health insurance. Is that for a family of 4? So, each individual in the plan is $271pmpm?

[The Anonymous Actuary]

Originally Posted by Hugh Jass

my question is $271 pmpm is not that bad. You mentioned at the beginning of the video that some people pay 1000's of dollars/month for health insurance. Is that for a family of 4? So, each individual in the plan is $271pmpm?

Yes, it is. I went through this in the original version of the video, but it was one of the many cuts required to get down from 19 minutes to under 10.

For a family of four in an individual policy, you would add up the various age/gender factors. So Mom and Dad would be around this $270 figure each, and the two kids would be less. I tried a super-fast version of this explanation, but then it came off as I was trying to "sneak one by" the viewer. A clear explanation puts me well over the 10 minute YouTube limit.

I'll have time for this age/gender issue in the next video, because it can be a huge part of the explanation for why rates go up so quickly in the individual market.

[Hugh Jass]

Originally Posted by The Anonymous Actuary

Yes, it is. I went through this in the original version of the video, but it was one of the many cuts required to get down from 19 minutes to under 10.

For a family of four in an individual policy, you would add up the various age/gender factors. So Mom and Dad would be around this $270 figure each, and the two kids would be less. I tried a super-fast version of this explanation, but then it came off as I was trying to "sneak one by" the viewer. A clear explanation puts me well over the 10 minute YouTube limit.

I'll have time for this age/gender issue in the next video, because it can be a huge part of the explanation for why rates go up so quickly in the individual market.

there's a 10 min limit on youtube? I know I've watched some stuff on there well over 10 min.

[homeys66]

TAA-

Another topic might be the "built in" trend in rates beyond regular HC trend. That's stuff like aging, deductible leveraging, and durational trend. Essentially, if you have a high deductible plan, you'll probably see 8% increases just from these factors....on top of actual HC trend. So 20% increases are understandable...although they seem like gouging.

[Keep It Real, Yo]

If you are a regular schmoe there is a 10 minute limit. To go over 10 minutes you hafta pay them or something.