March 22, 2014 8:17 p.m. ET
You could continue to see prices increasing this year for your health-care coverage.
Several recent studies point to provisions in the Affordable Care Act—such as the requirement that insurers cover sick individuals as well as preventive care, like mammograms—that could lead to higher prices, at least in the short term. The underlying cost of care itself, meanwhile, continues to rise at a steady clip.
One recent analysis finds that 80% of firms offering employee coverage have raised deductibles or other cost-sharing provisions, or are considering doing so. The survey, of more than 700 employers by Mercer LLC, indicates employers are looking to avoid a new tax that set to hit more-lavish plans in 2018, and to counter health-cost increases. Thus, employee out-of-pocket costs could rise.
EHealth, parent company of insurance retailer ehealthinsurance.com, is publishing premiums people pay on its site. Last month it reported that the average premium for an individual health plan that meets ACA requirements was $274 a month, up 39% from last year, before the ACA provisions took effect. Family plans averaged $663 a month, up 56% from a year earlier. These prices are for plans without government tax credits that help eligible people buy coverage.
Meanwhile, the cost of providing employer-based benefits is expected to rise 4.4% this year, according to a survey of 595 large employers by professional-services company Towers Watson TW -0.01% Towers Watson & Co. Cl A U.S.: NYSE $116.97 -0.01 -0.01% March 21, 2014 4:02 pm Volume (Delayed 15m) : 1.76M AFTER HOURS $116.97 0.00 0.00% March 21, 2014 7:26 pm Volume (Delayed 15m): 74,747 P/E Ratio 23.02 Market Cap $8.88 Billion Dividend Yield 0.48% Rev. per Employee $242,371 01/02/14 Pension Funding Levels Surged ... 01/02/14 Pension Funding Levels Surged ... More quote details and news » and the National Business Group on Health. While that's up slightly from last year's 4.1%, it's consistent with the sharp deceleration that began a decade ago, when costs were rising by more than 10%.
Costs are shifting to employees, that survey found. Employees' share of annual premiums for the average employer-provided plan is projected to rise 7% this year to $2,975. Employees are expected to shoulder 37% of premiums this year, up from 34% in 2011.
The ACA aims in part to control health-care spending. Provisions of the law, such as the creation of accountable-care organizations, were designed partially with that goal in mind. Insurers are subject to more-rigorous review when proposing higher premiums. And people who can't afford coverage can get government assistance via tax credits, help with copayments and expanded access to Medicaid, the federal/state programs for the poor. Healthcare.gov offers detailed information on premiums and links to a calculator to estimate the amount of premium assistance.
"Employers have been facing increasing premiums for employees for many years, long preceding the health-care law," said the Centers for Medicare and Medicaid Services in a statement. It noted premiums since the ACA's passage have grown at "the slowest rates on record."
For folks facing higher prices, a few strategies can help. If you're covered by your employer, talk to your human-resources department, counsels Cheryl Fish-Parcham, deputy director for health policy at Families USA, a not-for-profit focused on health-care consumers. This can be especially useful if you find it hard to afford rising deductibles and copayments in your plan. "They need to know when it's not working for an employee," she says.
If the employer plan costs more than about 10% of your income or doesn't meet ACA coverage requirements, you might find a better plan on the health-insurance marketplaces. Open enrollment closes on March 31, though, and won't reopen until the fall unless you have a major change in life circumstance.
If you have a choice of plans, evaluate their total costs, not just premiums. Factor in the deductible. If you can, save for these costs in a tax-advantaged health-savings account.
If you are shopping for an individual policy in the health-insurance marketplace, Ms. Fish-Parcham says, that might mean choosing a higher level of plan (they are coded gold, silver, etc. based on the offering s and the cost). Even within a particular level there could be a large variety. This might also vary by state, she says.
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