As the health insurance market struggles to manage the ongoing uncertainties of implementing the 2,700 pages of healthcare reform legislation passed by Congress and signed into law by President Obama, other market forces are at work to ensure that the world of health insurance remains a turbulent one.
According to the 22nd National Health Care Trend Survey by Buck Consultants, the costs for the most popular types of healthcare plans will go up by more than 10% next year, on average. Almost across the board, the projected increases in costs for preferred provider organizations, point of service plans, health maintenance organizations and high-deductible health plans are the highest they have been in three years. Buck notes that the anticipated rises in costs are largely due to expanded services mandated by healthcare reform, but that economic uncertainty also plays a role. With unemployment expected to top 10% before it begins going down again, the potential for laid off employees, who tend to be older and have higher claims histories, must be accounted for. Similar forces are also at work on dental and vision plans, which are also expected to get more expensive in the coming year.
This is bad news for policyholders, who are being asked in large numbers to bear an increasing share of the costs of healthcare. The Kaiser Family Foundation and the Health Research & Educational Trust notes in its recent research that the average total premium for family coverage is currently at $13,370, and the employee share of that amount has gone up 14% this year alone, to $3,997. Over the last five years, employees’ premium contributions have gone up by 47%, and overall premiums have risen 27%.
The issue of rising healthcare costs is already becoming a media staple, as open enrollment season begins, and employees must choose which healthcare package will see them through to the following year. In many cases, plans will be hitting policyholders with rate increases, sometimes moderate, sometimes severe. The larger point is that healthcare is getting more expensive across the board, and one way or another, insurers must find some way to get policyholders to become bigger cost-sharing partners than they have been in the past.