The simple answer is that insurance companies have to pay the prices demanded by care providers and drug companies. Insurers also have to make a profit to keep their shareholders happy, so premiums go up.

Drug prices have been rising because the costs of development are high. Inflation is creeping into the economy and federal government is reducing its share of the cost, passing as much on to the states and private insurers. Then there is the little problem of the ageing population as all the boomers start to claim for longer-term illnesses. Finally, more people are suing doctors so their insurance premiums are going up. That all gets passed on to you.

What can you do? Well, always ask for generic rather than branded drugs. Shop around for the most economical treatment and try negotiating for a lower bill. There are often auditors who will arbitrate if you dispute the amount claimed. Remember, you may be able to claim tax relief on medical expenses. There are times when it is better to stay home, rest and get better on your own. Save insurance for the bigger claims. Finally, think lifestyle changes to reduce risk. Stop smoking, reduce your weight and avoid dangerous sports.

Cheap health insurance is available!

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