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.
Or if you like, you can return to HealthBeat to comment. run75411
i dont know if it’s relevant or if it means anything, but i’ve been seeing articles about a double digit percentage rise in premiums somewhere just about every week…last week it was 4 carriers in Illinois asking for 25%…
Maggie must be in an alternate universe.
Everywhere I go premiums are going up as new coverages are added under ACA.
Employers are mitigating increases by passing more of the burden to the employees.
At least the early years of ACA are the working and insured middle class paying more for enhanced coverage for lots of people.
rural mail carriers have seen a 50% increase in what’s taken out of their paychecks for their health coverage…cant tell you if that’s due to a premium increase being passed on to the employees or something unique to the situation with USPS…
rjs, Well the USPS is kind of special when it comes to health insurance which they obtain through the federal government program for a lower price than other federal workers. Don’t know where the 50% comes from but the OPM tables don’t show nearly this type of increase. It does appear that their share is being increased however. The last column in the table shows the dollar increase.
Postal Category 1 rates apply to career employees covered by the National PostalMail Handlers Union (NPMHU), National Association of Letter Carriers (NALC) andPostal Police bargaining units.
Postal Category 2 rates apply to non-bargaining, non-PCES, non-law enforcementPostal Service career employees.
FFS non-USPS federal worker:
2012 archive of individual plans with both postal and non-postal premiums is at the link below. This info is not as neatly packaged.
I didn’t do any math on it but I don’t think there is a 50% increase. However remember 50% of not much is not the same as 50% of a whole lot. USPS union members have had a great deal in the past.
rjs, One more thing. There are a lot of politics going on right now with the postal service. Health care is front and center in the fight. Remember the USPS is “privatized” except where it is not so it needs to treat it’s liabilities different from the way the government treats theirs. Could be there is some discussion on taxing employees 50% or something. I didn’t see anything about 50% in my Googles.
Well,not sure who or what to believe in but I do hope that it’ll have a “positive effect” for my family’s budget. Let’s see how it goes.
anna lee, here’s the story; the amount taken out of one rural carriers bi-weekly pay rose from $86 to $138…that appears to be a 60% hike, but that’s for just one individual worker…the rural carrier’s benefit plan is now with coventry healthcare (was once with mutual of omaha), which i cant identify on your postal benefits pdf…
also did some digging as to why their rates went up; here’s the article:
Rural letter carriers’ contract concessions follow APWU precedent – Federal Times Blog – When American Postal Workers Union members agreed to a contract last year that included wage and benefit concessions, they were obviously binding themselves for the life of the agreement with the U.S. Postal Service. Less obvious—at least to FedLine–was that they were also setting the stage for similar givebacks by other postal unions.
The deal also means lower wages for new non-career rural carrier associates to the tune of more than 20 percent, the summary says. Rural letter carriers will also shoulder an increasing share of the cost of their health insurance premiums, exactly along the lines of the APWU contract.
looks like the city workers union cut a bad deal, & it was crammed down on the rural carriers too..
A hot topic this week is the Obamacare punishment of smokers – post forthcoming.
most of this thread has been by people better informed than i am.
but “punishment of smokers”?
c’mon. they are punishing themselves. and to the extent that “we” will be paying their medical bills, they are punishing us.
150% of the lowest cost insuree for smokers as opposed to 300% of the lowest cost insuree for the elderly? Crocodile tears for the smokers as they got off easily for destroying themselves. If todays insuarnce policies adjusted it higher for smokers; in many cases they do, why is it so bad now?
Even the elderly get off at 300% of the lowest insuree cost as it is more significant now then as regulated under the MLR. Insurance companies are trying to increase it to 500 to 600% of the lowest cost insurees. If you feel the need to write about smokers; by all means, I will answer it as I am here and in another previous post and in the multiple other ones where I explained it.
allow me to ride on your comment to point out the insanity of charging “elderly” 300 or 500 percent of young people’s premium.
sure the elderly will cost more, but they will have less money. it would be more intelligent to just prorate the costs of a lifetime of care… including old age costs… over a working lifetime.
this of course is what Medicare does. but it doesn’t seem to be something private insurance can do. or that most people can understand.
one of the good reasons for “Medicare for all.”
Not sure what this smoking or obesity is all about.
Are we going to treat people who are sick or not or maybe or sometimes or what?
Oh well, tell me – if a 85 year old, smoked all his life quit smoking, would it really change anything about his future health costs?
Are there new studies showing that smokers and other sinners cost society more than people with good genetics? I thought most to all of the studies show that being healthy and living longer costs more (on average) than smoking, drinking, obesity, etc. (total costs).
I must admit that it amuses me that the people subject to the most punishment for their sins are the ones that grew up in an era of government subsidies to tobacco which probably helped to fund the ads enticing the chullen and grandchullen to smoke.
i am not sure that “obesity” is a preventable condition.
At least not as obviously as the illnesses associated with tobacco.
There is an element of “political” opinion in all this of course, but it would be a lot easier for me to accept a higher insurance rate for smokers than a higher insurance rate for “overweight,” and i am not at all sure where you are going with the “high cost” of being healthy and living longer.
and of course i argue that the time to collect the insurance premium is while the (future) patient is of working age, and not when he is 85.
i don’t think anyone is proposing we not treat the smoking related cancers, just raise the insurance for people who have risky behaviors.
and yes, “we” are paying for their treatment.
“sin” is a much abused word. it implies for most people behavior that god does not like.. so if you don’t believe in god you don’t believe in sin. or maybe it’s the other way around.
it struck me one day that “sin” is “the sort of thing that will hurt you, or hurt others.”
and the only way god punishes “sin” is the same way he punishes your if you disobey the law of gravity by leaping off tall buildings.
Years ago I saw a Dutch study and a US study that concluded that because smokers have a spike in costs and die early they don’t have the incidence of costly diseases like Parkinson’s, MS, Dementia, and Alzheimer’s (etc.). This makes their lifetime medical costs less.
Then there are other studies that say the early studies were wrong and should have emphasized various things that, quite frankly, bias the result to the opposite conclusion.
Which is right? I don’t know. The same for obesity. Obesity is interesting. Do we tax obesity itself or the bad habits? I wonder how many disabled people who have limited mobility are obese.
Of course it is also interesting to speculate on slippery slopes but I won’t go there.
It just seems to me that if someone is sick, they need treatment. At that point it really doesn’t matter how they got sick or if they were able to pay their insurance or their insurance plus 50%.
When we quit talking about lowering cost and, instead, are diverted to discussing or fighting over who deserves to see the doctor, we lend strong support to the status quo with a small fix of status quo plus 50% for some now and many more later if we still can’t control cost.
Not really important but it just set me to thinking. You see I really believe they will finally get genetics embedded in this if they don’t go to single payer. Everyone want to get richer and richer and to put everything on Wall Street. Perhaps we will go to the health-care wing of WalMart to get our doctor fix sometime in the future.
And, is there really a difference between sin and behavior not popular in society. I really don’t see much difference in the way sinners and other outcasts are treated.
We need a new approach to medicine. Instead of concentrating on getting people well as we do now, we should concentrate on keeping people healthy.
all this sounds very confused to me.
i think there is some danger we will find ourselves all classified by “risk” according to some DNA analysis.
would be just the sort of thing the money boys would do.
i favor a “we are all in this together” approach (single payer… no “prior conditions”) because we all have prior conditions. just not all ones we know about.
based on observation i don’t think “obesity” is as obviously under the control of the person as is “smoking.” but rather than charge a “smoking premium” i would offer a “non smoking discount.”
that said, i don’t trust “studies” much myself. on the other hand i don’t want to revisit the argument that smoking is good for you (nine new york doctors smoke Kools)… we went through that already. at about the same time they were telling us that lead in gasoline was good for us.
as for “sin,” the gratuitous essay was just me being me. i hardly expect anyone to know what i am talking about, much less agree with me.
trust me, i don’t think your smoking is a “sin.” i do think it is harmful to your health. and extremely unpleasant to others who have to share your air space.
Precisely what the PPACA does. It concentrates on better outcomes rather than services for fees. It changes the paradigm and concentrates on primary care as opposed to specialists.
At best it is probably a small move in that direction, but that’s better than nothing…which is what the ACA opponents want.
Aaron Carroll at The Incidental Economist has a new post:
How much will the last five years of life cost you?
think that questtion was brought up in this thread..
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MedicalInsurance serves as our protection for any possible illnesses. We can never tell when accidents or any untoward incidents would occur. It’s better to be prepared than sorry.