I just got my renewal notice for my health insurance policy (my open enrollment happens during the summer). As has happened every year since I began paying for health insurance, my monthly premium is going up.
Thanks to the fact that I have a HSA, my premium is still lower than what it was a few years ago, prior to making the switch. But it's still kind of depressing to see the cost rise each year.
I was interested to see whether or not my premium would increase more than in years past, due to the fact that most of the rest of the provisions under the Patient Protection and Affordable Care Act (PPACA) kick in during 2014.
My premium increase was in line with what it's been the last few years. In fact, rather than increasing by $85 to $90 a month, it's “only” increasing by $80 per month. And that's even with the fact that one of my prescriptions is now completely covered and I pay nothing for it (a huge upgrade from paying a little more than $100 a month for it).
PPACA Results in Slower Rise of Health Care Costs
According to an article on CNN Money, health care costs are projected to rise at a slower pace in 2014 than in 2013. The article points out that double-digit spikes in health care costs were common in the early 2000s. Additionally, the article reports that PwC's Health Research Institute estimates that costs will rise by 6.5% in 2014 — that's lower than the estimated 7.5% increase forecasted for 2013.
There are projections that employer health care costs will increase about 4.5% on average, once the PPACA dust settles. The optimistic version of this is that employers will pass the savings on to their workers in the form of premiums that rise at a slower pace.
Even if the PPACA does slow rising health care costs as projected, the reality is that health care costs are still rising at a faster rate than inflation — and wages certainly can't keep up.
Are Your Health Care Costs Changing?
Of course, averages paint a pretty picture, but how will the PPACA affect you on a more personal level? As always, your individual situation determines how much you will be impacted. In my case, the PPACA hasn't had much of an impact on me at all. I already purchase health insurance on individual basis for my family, and my health care costs remain relatively stable over time, accounting for regular premium increases and inflation related to prescription drug costs.
My health care costs, overall, have gone down, since my most recent premium increase is offset by the fact that I no longer have to pay monthly for a particular prescription. But I know that won't be the case for everyone.
Those who currently don't buy health insurance, and some of those with certain high deductible plans are seeing a big increase as well. Some small businesses might struggle as well, since the tax credits offered to business for offering health care coverage might not completely offset the costs.
How are your health costs changing? Are you in with the average? Or is your individual situation different?