The future of YOUR health insurance premiums

by Maggie Mahar

run75441: Maggie Mahar writes on future insurance premium increases something consistently arises in the debate on the PPACA. The complete post can be found at healthinsurance.org

The future of YOUR health insurance premiums

Today, many Americans are asking, “Will my premiums go up in 2014?”

There is no simple answer.

According to Families USA, the Affordable Care Act (ACA) will have a positive effect on the typical family’s budget. Using an economic model that can factor in all provisions of the Act, Family’s USA estimates that by 2019, when the law is fully implemented, “the average household will be $1,571 better off.”
Even high-income families will save: thanks to rules that limit co-pays, and reward providers for becoming more efficient, “those earning $100,000 to $250,000″ will spend $779 less on medical care.”
But these are “averages.” They don’t tell you whether your premiums will rise or fall.

The answer will depend on: your income, your age, your gender, whether a past illness or injury has been labeled a pre-existing condition, who you work for, and what type of insurance you have now:

If you work for a large company:

The ACA will have a “negligible” effect on your premiums says the Congressional Budget Office (CBO).
This doesn’t mean that your costs won’t climb in 2014. As long as medical product-makers and providers continue to raise prices, premiums will edge up each year.

But in 2012 average premiums for employer-based insurance rose by just 3 percent for single coverage and 4 percent for families, a “modest increase” when compared to 8 percent to 12 percent jumps in past years. And on average, employee co-pays and deductibles remained flat.

Granted, a 3 percent to 4 percent increase still outpaces growth in workers’ wages (1.7 percent percent) and general inflation (2.3 percent) percent). But as reform reins in spending, annual increases for large groups could fall to 2 percent – or less.

If you work for a small company with more than 50 employees:

Your boss will be more likely to offer affordable benefits, in part because, if he doesn’t, he will have to pay a penalty.

Moreover, he will find insurance less expensive. Today, small businesses pay 18 percent more than large companies because the administrative costs of hand-selling plans to small groups are sky-high.
But starting in 2014, businesses with fewer than 100 employees will begin buying insurance in exchanges where they will become part of a large group, and eligible for lower rates.

Finally, some companies with fewer than 25 employees will receive subsidies that cover 50 percent of what they lay out for insurance.

If you work for a small firm where many employees are older, female, or suffer from a pre-existing condition:

Your premiums may well fall. Today, most states let insurers charge small firms more if many of their workers are older or are women.  They also can jack up premiums if just a few workers fall ill or are injured.

This post originally appeared on healthinsurance.org. To find out more about the importance of where you live, whether you are a woman, whether you are young (20-something to 30-something) or older (in your 50-65), your income, and your health status please click there.

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