The amount of money that passes through the hands of health insurance companies in the United States in one year is so vast that it defies comprehension; more than enough to pay the entire defense department budget four times with tens of billions left over. Apparently though, that is not enough because the industry continues to impose increased rate changes at a pace that outstrips the ability of the average family or business to pay them.

Because of the nature of, or lack of state and federal laws that have controlled these rates in the past; health insurance companies were not constrained to spend even a minimum percentage of their earnings on providing actual health care coverage. In fact, enforceable laws to reign in drastically inflating premiums and profits are virtually nonexistent. From 2000 to 2008, insurance premiums doubled while the total cost of health care services increased by only 40%. The extra revenues generated by the rate changes went directly into the bottom line of the health insurance companies. In the past ten years, these companies have spent more than one trillion dollars on administrative costs which include exorbitant and ever increasing executive salaries. They are making record profits because they impose premium increases at a rate that far exceeds their costs.

The underlying reason for the rate changes is to satisfy their investors and Wall Street financial analysts. These are publically owned companies and the first responsibility of such a company is to its shareholders; not to its customers. It has not been a mandated standard that health insurance companies make a priority of providing quality health care to their customers or that they find ways to use some of their revenues to make this essential service more accessible to who cannot afford it. The opposite is the case. By citing pre-existing conditions and many other similar tactics, the companies can instead rid themselves of the people who need their products the most but are the least capable of paying for them

The situation may be changing due to new federal regulations that will establish legal standards by which certain minimum percentages of premium revenue will be constrained to be spent on health care services and ensuring that policy holders get better value for their premium dollars. It will become illegal for a company to refuse coverage on the basis of pre-existing conditions or to impose rate changes based on the cost of offering coverage for such conditions. Legal rate changes will no longer be arbitrary or unconnected to real costs.

There is a likelihood that the health care industry will soon be partially regulated by laws just as most other industries are.