Premium Growth Slows But Consumers Feel Squeeze

By Cyril Tuohy
InsuranceNewsNet

Health insurance premium growth slowed in 31 states and the District of Columbia between 2010 and 2013, following passage of the Affordable Care Act (ACA), according to a new study by The Commonwealth Fund.

But because medical costs are still growing faster than incomes, and because workers are shouldering a greater care of the burden through out of pocket costs, health care costs keep taking a bigger bite out of household budgets, the study also found.

Results are included in “State Trends in the Cost of Employer Health Insurance Coverage, 2003-2013,” published last month.

“Growth in employer premiums and deductible slowed in many states after passage of the Affordable Care Act,” said Sara R. Collins, vice president for health care coverage and access at The Commonwealth Fund and a co-author of the report. “However, slow wage growth means working families in every state are being squeezed by health care costs.”

Average annual premiums for employee-only coverage grew 4.1 percent from 2010 to 2013, versus 5.1 percent from 2003 to 2010, the study found.

Among the 31 states and the District of Columbia that saw a slowdown in premium growth, 12 states saw a decline of at least 3 percentage points over the period: Arizona, Delaware, Florida, Louisiana, Maine, Mississippi, Nebraska, North Carolina, Oregon, Rhode Island, Virginia and Wisconsin.

In Louisiana, average annual premium growth declined 0.01 percent in 2013, the study also found.

Premium growth rates registered 6 percent per year or more from 2010 to 2013 in Alaska, Colorado, Indiana, Maryland, New Hampshire, New Jersey, Ohio, South Dakota, West Virginia and Wyoming, the study also found.

The study found that in 2013, family health care premiums, including the employer and employee contributions, ranged from a low of $13,477 in Alabama, Arkansas, Idaho, Mississippi and Hawaii, to a high of $20,715 in the District of Columbia, New Jersey, Massachusetts, New York and Alaska.

Proponents of the ACA said it would extend coverage to tens of millions of Americans who weren’t buying insurance because they didn’t benefit from an employer-sponsored health plan, or because it was too expensive.

Opponents said the new mandates required by the law would make health care even more expensive.

ACA coverage mandates began Jan. 1, 2013, with new coverage requirements being phased in during later years.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at cyril.tuohy@innfeedback.com.