Here’s proof health care costs have remained essentially static for the past 10 years and more. This is a case study on a risk pool established in 1998 for several school districts in South Texas. They have not had a rate increase in 15 years and have improved benefits at the same time. The pool is well reserved. Employee only rate is in the low $300’s.
The graph above tells the story. The red line represents medical trend using historical industry averages. The blue line are actual paid claims. The red line is a 45 degree angle. The blue line is flat.
Plans employing managed care networks pay claims based on discounts off the red line. Their costs go up in parallel with the red line.
This risk pool pays claims based on cost plus a margin. When costs remain flat paid claims remain flat too. This is not rocket science.
So now you know why your health insurance rates increase each year.