Health care costs climb moderately, survey says

Tame compared to a decade ago

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Premiums for employer-provided health insurance have increased by relatively modest amounts this year, according to a new survey, a further sign that once-torrid health care inflation has abated for now.

The average annual premium for a family rose 4 percent in 2013, to $16,351, according to the survey results released Tuesday by the Kaiser Family Foundation. Annual premiums for individual policies purchased through an employer rose 5 percent, to $5,884.

The 4 percent increase for a family is relatively tame, at least compared with the roughly 10 percent annual increases experienced a decade ago. But it is still a far bigger rise than the 1.8 percent increase in wages and the 1.1 percent inflation rate in the last year, the foundation said.

"If you are comparing it to 10 years ago in health care, it seems modest," said Helen B. Darling, chief executive of the National Business Group on Health, which represents large employers. "If you compare it to the economy and what inflation is doing, I don't think it's modest at all."

The data also suggest that the new health care law is not leading, at least so far, to a rapid escalation of insurance costs.

"The critics will have a much harder time blaming big premium increases in employer insurance on Obamacare this year, because there aren't any big premium increases," said Kaiser foundation chief executive Drew Altman in a phone news conference Tuesday.

Conversely, however, it is not clear whether the Affordable Care Act, as the law is formally known, has contributed to the moderating of premium increases, Kaiser researchers said. Premiums have been held in check partly by increasing out-of-pocket costs that workers pay through co-payments and deductibles.

The survey found that 78 percent of covered workers have a general deductible, up from 72 percent in 2012. About 38 percent of covered workers now face a deductible of at least $1,000. At companies with fewer than 200 employees, 58 percent of covered workers have a deductible that large, with 31 percent having a deductible of at least $2,000, up from 12 percent in 2008.

"It's part of what I see as a quiet revolution in health insurance, from more comprehensive to less comprehensive, with higher deductibles," said Mr. Altman, who added that that should appeal to conservatives. "The vision of insurance that they've always favored, with more skin in the game, is the one that's coming to dominate in the marketplace."

While out-of-pocket costs are going up, the proportion of total premiums paid by workers out of their paychecks did not change in the last year, Kaiser said. On average, workers paid $4,565, or about 28 percent, of the average family premium and $999, or 17 percent, of the average individual premium.

The survey results showed that employers are not dropping health benefits and forcing their employees to seek coverage on the new exchanges being set up under the Affordable Care Act.

About 57 percent of all companies are offering health benefits this year, compared with 61 percent last year, a difference that was not statistically significant. Among companies with three to nine workers, 45 percent offered some benefits, compared with 50 percent in 2012, a decline that also was not statistically significant.

The 4 percent increase in family premiums in 2013 was similar to the increase in 2012 and in most of the last several years. But since 1999, premiums have nearly tripled, while wages have gone up only 50 percent, and consumer prices only 40 percent.

The slower increase in premiums appears to reflect slower growth of health care spending in general, partly explained by people forgoing doctor visits and medical procedures because of the bad economy.

Kaiser conducted the survey of more than 2,000 companies of various sizes, with the Health Research and Educational Trust, affiliated with the American Hospital Association.

A separate survey to be released today, commissioned by the Commonwealth Fund, has found that an estimated 7.8 million young adults are insured because of the Affordable Care Act provision letting them be covered by their parents' plan. The survey found that, contrary to common perceptions, many young adults, aged 19 to 29, are interested in health insurance. But it also found that only 27 percent were aware of the new state health insurance marketplaces starting up Oct. 1.

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