Health Inc.

Insurance Costs Rise, But More Slowly

Heath coverage will cost you more than last year, but not as much as it might have. i i

Heath coverage will cost you more than last year, but not as much as it might have. iStockphoto.com hide caption

itoggle caption iStockphoto.com
Heath coverage will cost you more than last year, but not as much as it might have.

Heath coverage will cost you more than last year, but not as much as it might have.

iStockphoto.com

If you get health insurance on the job, chances are it cost more again this year.

Annual family health insurance premiums rose about 4 percent to $15,745 in 2012, according to the latest survey by the Kaiser Family Foundation and Health Research and Educational Trust.

Now that's a fairly modest increase by historical standards, and well down from last year's 9 percent. Still, it's more than double the 1.7 percent increase in average wages and way above the 2.3 percent rate of general inflation this year.

"In terms of employee insurance costs, this year's 4 percent increase qualifies as a good year, but it still takes a growing bit out of middle-class workers' wages, which have been flat or falling in real terms," said Kaiser President and CEO Drew Altman.

Why the slowdown? One big reason may lie in a general decline in health care use. As the economy sputtered, people tended to be more reluctant to use health care services. At the same time, employers passed more of the costs to workers — in the form of higher premium and cost sharing, making them more reluctant still.

One new finding in this year's survey is that firms that employ mostly lower-wage workers (those earning $24,000 annually or less) are more likely to offer coverage with high deductibles and other out-of-pocket costs than firms that have mostly higher-paid (more than $55,000 annually) workers. At the firms with many lower-paid workers, 44 percent of those with coverage face an annual deductible of $1,000 or more, compared to only 29 percent of those at higher-paying firms.

Given that the survey comes in the midst of a presidential election campaign, the natural question will be what impact President Obama's Affordable Care Act has had on the better-than-expected results.

The answer: Not much.

"We're still waiting for a lot of the important provisions to take effect for small firms," said Kaiser's Gary Claxton. That won't happen until 2014.

That didn't stop opponents of the law, however, from blaming it for the increases — or rather, blaming it for not stopping the increases altogether.

"Candidate Obama said repeatedly his bill would CUT premiums by an average of $2,500 per family — meaning premiums would go DOWN, not merely just 'go up by less than projected.' The campaign also promised that that those reductions would occur within Obama's first term," said a release from the Republican staff of the Joint Economic Committee.

But the survey did point out at least one clear — and popular — result of one of the health law's early benefits. It found 2.9 million young adults (up to age 26) are currently covered on their parents' plans who otherwise wouldn't have employer coverage. That's up from 2.3 million a year earlier.

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