Why does my Health Insurance Policy increase every year and what can I do about it?

The benefits of having a medical insurance policy are many:

✓ Pays a percentage of your doctor visits

✓ Pays hospitalization bills

✓ Gives discounts on medications

✓ Offers protection to your family in case of emergency

✓ Looks after your body and mind, and works as a health optimization tool

✓ Protects your assets because you do not need to pay major medical expenses out-of-pocket

If you carry an insurance policy then you are familiar with all of these benefits, but what happens when your insurance policy premium suddenly increases at your renewal? Your insurance broker explains to you that such an increase is the result of the inflation of medical care, a global phenomenon. But let’s talk more about the reasons for price increases in your Health/Medical Insurance policy:

Medical inflation according to the study Personalized Health: An opportunity in process of expansion, carried out by Pan American Life Insurance Group and Pan American Mexico, is being driven mainly by two factors that are causing health insurance to increase in cost:

1. Increase in medication costs. The entry of new first-generation drugs and the significant increase in prices of branded, bio-equivalent and generic drugs have contributed to hitting the consumer’s pocket each year.
2. Increase in the prices of hospital supplies and medical equipment. Hospital supplies, osteosynthesis materials and surgical equipment, are items that historically haven’t been specifically negotiated in contracts that hospitals sign with insurance companies in the region. There have been significant increases in the costs these supplies, particularly in the materials the hospital buys from a third party, such as surgical trays, prostheses and medications. On many occasions, the complete list of prices of services and supplies offered by hospitals are not shared with insurance companies and, consequently, sometimes there is no way to validate the actual discount the patients get.

According to Medical Trends Around the World 2015, in 21 out of 29 countries that were evaluated, medical inflation accounted for twice the overall inflation. In 2015, medical inflation of health insurance companies in Mexico and Latin America was 12.7 percent versus a general inflation of 8.5 percent.

According to José Gabriel Luque, Regional Medical Director of PALIG (Pan American Life Insurance Group), the medical inflation is intensified by the nature of the current health system, except for very punctual examples in the region. He states,“we are facing a health model, whose focus has been by tradition, the treatment and cure of illnesses. Although it is proven that, globally, it is cheaper to prevent than cure.”

Despite the fact that medical inflation is a latent factor, there are certain aspects to take into account at the time of receiving medical attention:

• Request and know the breakdown of the medical costs you are being charged for
• Request facturas, not only payment receipts of the medical expenses
• Compare prices of the medication you are prescribed
• Review, know and look after your clinical history

Health insurance offers peace of mind, and this is boosted even more when people are better informed.