Private Health Insurance Premiums and Rate Reviews
"In general, the premiums charged by health insurance companies represent actuarial estimates of
the amount that would be required to cover three main components: (1) the expected cost of the
health benefits covered under the plan, (2) the business administrative costs of operating the plan,
and (3) a profit. The final premium calculation often is adjusted upward or downward to reflect
several factors, such as making up for a previous financial loss.

Health insurance premiums have been trending up, while the value of coverage has trended down.
Available data indicate that both administrative and medical costs continue to rise, but the rate of
growth in these expenses slowed between 2008 and 2009. The data also suggest that the rise in
medical costs is primarily attributable to the price of services, not increased utilization..."