By Quentin Fottrell
Despite the Obama administration’s ambitious health care overhaul, insurance premiums are on the rise.
The May 2011 medical index by consulting firm Milliman Inc. says health care costs for a family of four will rise 7.3% in 2011 to $19,393 for those insured through work, with employee out-of-pocket expenses up 9.2% this year versus 6.6% last year. “Trends in health care spending still far exceed most other goods and services,” it said.
Milliman’s researchers said that employees are paying around $8,000 of the total annual healthcare costs, higher than other areas of consumer spending, as employers offer health plans with higher deductibles, and co-insurance and co-payment limits to control costs and to encourage workers to use medical care more selectively. That includes $4,728 in an employee contribution and $3,280 in employee out-of-pocket costs.
Premiums are rising even faster in Massachusetts, even after that state introduced its own health care reform in 2006 requiring residents to buy health insurance in that state, according to Consumer Watchdog. Insurance premiums for a single plan have risen 13.4% nationally from 2006 to 2009 versus a much larger 18.4% in Massachusetts, while premiums for a family plan rose 19.8% in Massachusetts in the same period, versus 14.5% nationally.
Consumers are increasingly unable to afford the coverage they have, the report says: “Massachusetts is hard‐pressed to maintain affordability. Premiums in the state remain the second-highest in the nation and rising costs are threatening to unbalance the state budget.” It adds, “The passage of the federal [healthcare] reform triggered further outsize increases by insurance companies apparently seeking to establish high base rates in advance of the law’s implementation.”
This echoes conclusions in a recent study in the American Journal of Medicine, which concluded that the percentage of personal bankruptcies related to medical bills or illness in Massachusetts hasn’t improved much since 2006. Medical bankruptcies as a percentage of personal bankruptcies eased only slightly to 52.9% from 59.3%.
A spokeswoman for the National Association of Health Underwriters says, “Even in a highly regulated market like Massachusetts, premiums continue to rise because consumers continue to treat health care as if it is a free service. If we are more aware of where we are spending our health care dollars, we can more effectively provide quality care for all Americans,” she says.
“Health insurance is expensive because health care is expensive,” the spokeswoman adds, citing a weaker economy putting pressure on employers to decrease contributions, a shortage of primary care physicians in rural areas, and insurance carriers pulling out of the individual market and discontinuing child-only policies.
What do you think is behind these rises?