The latest annual inflation rate for the United States is 2.1% through the 12 months ended June 2014.
Then we have projected increases in health insurance premiums for 2015. Take your pick. Reports indicate average increases of 7.5% give or take a few points with some plans in the double-digit range and even a very few showing decreases. The only Americans not facing a premium increase in 2015 are Medicare Part B beneficiaries which is a (political) mystery unto itself … read between the lines😗
But even as we cheer about lower, moderating or cooling health care costs, most people are facing premium increases more than triple the general inflation rate. Individuals with employer coverage face a dual whammy; higher premiums and higher out-of-pocket costs through higher deductibles, etc.
On a relative basis we are not making much progress and we are not even seeing the whole picture. Premiums for ACA exchange plans are not even credible at this point for several reasons; insufficient claims experience, enrollment glitches still being worked out, pent-up demand and new demand through more “free” benefits not fully utilized and perhaps most significant is that premiums are being subsidized through several reinsurance schemes in the law. For one, employers (and their employees) are subsidizing bad risks via a $63 per covered person fee for the next few years.
It will take several years for all this to work out and to see the credible impact of Obamacare on health care costs and hence premiums. In the meantime premium increases three or more times the rate of inflation are a good thing, right⁉️