Unemployment is high and wages stagnant, but that hasn’t stopped health insurance companies from hiking premiums by 9 percent this year, a new survey shows.
The poll by the nonprofit Kaiser Family Foundation found that the average family insurance plan purchased through an employer now costs over $15,000 per year. That's more than double the average price 10 years ago, the New York Times calculates. And Kaiser Family Foundation president Drew Altman points out it's more than the cost of a new Chevy Aveo or Ford Fiesta.
Premiums soared in the decade's first half, but had grown more moderately in recent years.
The causes of this year's spike are debatable, but Obamacare is sure to take some of the blame. The Times says some analysts believe insurance companies are getting their price hikes in now before a provision kicks in next year requiring them to justify any double-digit increase. And some of the rise in costs is likely coming from requirements already in effect, such as mammogram screenings and other preventive services.
The White House moved quickly to offer its own explanation: Insurers raised their prices in anticipation of higher costs, but ended up pocketing some of the money in profits. "Wall Street analysts’ review of results from the first quarter of 2011 found that 13 of the top 14 health insurers exceeded their earnings expectations, with profits that were over 45 percent higher than estimated," the administration noted in a blog post.
If that’s true, next year’s price hikes could be more moderate. But meanwhile, employers are feeling the squeeze, with many citing the high cost of coverage as a deterrent to hiring. And increasingly, they’re passing the costs on to workers in the form of higher out-of-pocket costs, the Washington Post reports. Half of all workers at small firms now pay annual deductibles of $1,000 or more.
In a blog post earlier this month, the Post pointed out that health care cost increases wiped out nearly all of the average middle-class family’s wage growth from 1999 to 2009.
The news isn’t all bad, The New Republic’s Jonathan Cohn argues. The Affordable Care Act has improved coverage for many young adults, with some 2.3 million taking advantage of a provision that allows them to enroll in their parents’ plans up to age 26.