September 26, 2009
Simple arithmetic - From Kaiser Family Foundation
The 5% increase we found in premiums is moderate by long-term historical standards. For example, two different times during the last decade premiums increased by 13% a year, in 2002 and 2003. This year's increase continues a multi-year period of relative moderation in premium increases. Still, over the last ten years premiums have increased by 131%, while wages have grown 38% and inflation has grown 28%. Consider this: If people (and businesses) are as concerned as they are now about rising health care costs in a period when they are actually moderating, how much more concerned will they be when rates of increase return to historic averages?
Let's do some very simple arithmetic. Start with a fairly conservative assumption: If we assume that premium increases over the next ten years will average what they did over the last five (about 6.1% per year), the average premium for a family policy in 2019 will be $24,180. That's a big number. On the other hand, if we assume increases revert to the average of the last ten years--an average annual increase of about 8.7% and a very plausible scenario--premiums in 2019 will average a whopping $30,803, a very scary number...
This week we put out our annual benchmark survey of employer health coverage and costs. Two numbers jumped off the pages.
The first number was the average cost of a family health insurance policy in 2009: $13,375. To put that number in context, if you are an employer, you can hire an employee at the minimum wage for about $15,000 per year. If you are a consumer, you can rent an average two-bedroom apartment nationwide for $11,136 per year (though it is quite a bit more here in Menlo Park, California where our Foundation is based). You can also buy a new Chevy Aveo for $12,000, and it gets 35 miles per gallon on the highway.
The other result that jumped off the page was the stark contrast between increases in health insurance premiums and overall inflation in the general economy. Premiums went up 5% and prices overall fell 0.7% (mainly driven by a big drop-off in energy prices).
I went to the link to see, but if you are paying $200 per month and have a fialmy of 4, then it appears you are under a employer sponsored plan, so it would not apply to you.This is based on people who have private insurance vs group, medicare, medicaid etc. It just takes into account the age of each person, but does not allow to enter 4 people and how to break down per the fialmy income. But as it stands now, no one knows what will happen, if it will pass or not. Even if the bill passes, it will be either 2013 or 2014 and the rates are based on those years. In private insurance, the cost goes up each year based on your age. Mine was $259, but at renewal this year has gone up to $309. Whereas in group insurance it is based on the rates that the employer buys and passed on to the employees and is usually around 35% of what the employer pays. But you can be correct and I am wrong, we will have to wait and see if anything at all passes or not. Considering how our government passes things, it could take another 5 years or more if anything passes or not.
Posted by: Mukul at November 12, 2012 12:55 AM