The Premium Slowdown Continues

Premiums

This is welcome news:

On Wednesday, the Kaiser Family Foundation published its annual survey on the health plans that employers are offering their workers. It’s large and comprehensive and generally regarded as the most reliable measure of what’s happening in the employer market.

The big finding is that the growth in health insurance premiums was only 3 percent between 2013 and 2014. That’s tied for the lowest rate of increase since Kaiser started measuring (this is the 16th year of the survey).

Cohn unpacks the survey:

Critics of the Affordable Care Act insisted it would cause employers to jack up premiums. There’s no evidence of that happening.

And of course this data is consistent with all the other recent data we’ve gotten on health care spending under Obamacare. National health care spending, the amount of money we spend as a country, is rising at historically low rates. Premiums inside the new Obamacare exchanges, where people buy insurance on their own, are generally rising at moderate rates and in some cases declining, which is highly unusual.

It’s hard to say exactly how much Obamacare has to do with these changes. But it makes the critics’ arguments look awfully shaky.

Drum chips in his two cents:

How long will this slowdown in health care inflation last? My guess is that it’s more or less permanent. It will vary a bit from year to year, and I wouldn’t be surprised to see it hit 3-4 points above the general inflation rate in some years. But the downward trend has been in place for three decades now, and that’s long enough to suggest that it was the double-digit increases of the 80s and early 90s that were the outliers. Aside from those spikes, the current smaller increases are roughly similar to health care spending increases over the past half century.

Kliff explains “why, even with premiums rising slowly, it might not feel to workers they’re actually getting a better deal”:

Deductibles have grown 47 percent since 2009; 34 percent of workers are now enrolled in health insurance plans that have a deductible of $2,000 or higher. While premiums grow slowly, workers are essentially asked to spend money in other places with these rising deductibles.

Jason Millman also focuses on those increasing deductibles:

High-deductible plans are attractive to employers because they get to bear less of the insurance cost. Many economists also like the plans, because they’re supposed to make people spend more wisely on their health care.

The big question is whether employees are prepared to handle potentially big medical bills before they hit their deductible. As the The Upshot noted last week, people in employer insurance recently said they’re pretty happy with the services their health plans cover, but they’re much less satisfied with what they’re paying out of their own pockets.