The bottom line is that health insurers have a bottom line; they are businesses like any other and the main focus in business is to have the highest profit possible.  Many businesses “hide” some profit through titles like “administrative expenses”.  That being said, it is very likely that many of our health insurance companies are making more of a profit than is necessary to sufficiently operate the company.  So with the current sliding economy and rising inflation rates, it is quite possible that these “costs” are contributing to the rise in health care costs.  In other words, costs are rising in order to maintain the same level of ultimate profit that insurance companies desire. 

Although SB 1440 is a step in the right direction for California’s health care reform, it is not flawless.  Unfortunately, the bill does not address the issue of actual healthcare premiums.  Although restricting admin costs and excessive profits may help redistribute some of the profits, it will not guarantee that the premiums will be capped.

In order to truly save money for employers as well as the insured, health care reformers should consider some of the following:

• The absence of strong preventative care is leading to an extremely large number of chronic disease cases, such as complications from obesity, that will result in astounding costs in healthcare within the next 20 years.
• The current infrastructure is not capable of managing the exponentially rising costs that are resulting from simple lifestyle choices that could be radically reduced with better education and preventative medicine.  Issues such as poor nutrition, lack of physical activity, and a focus on image perfection instead of overall wellness are only some of the contributing factors to our society’s deteriorating health.
• Our nation is increasingly dependent on pharmaceuticals to solve minor health issues that may be solved with non-invasive care and/or prevention.  This dependence has created a very lucrative industry that is      consequently increasing the costs of healthcare.
• The development of new technologies for medicine has been tremendous for the advances of diagnostic tools and better treatment of very severe diseases.  However, these technologies are outrageously expensive to research, develop, utilize, and maintain, which all lead to the increased costs of healthcare.

The above are only a few of the many reasons healthcare costs continue to increase.  These are the types of problems that healthcare reformers must address to truly drive down costs.  So, even though SB 1440 will help ensure that insurance companies continue to spend adequate amounts of money on the insured, it will not address the true issues of increased healthcare costs that must be controlled for the future wellness of the state.