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These Charts Are Good News if Your Employer Pays for Health Insurance

Why the slow rise in premiums is a win for Obamacare

Adam Berry/Stringer/Getty Images

We have new information about what we’re paying for health insurance these days. And like most of the news we’ve been getting related to health care Obamacare lately, it’s good—with a catch.

The data is about the premiums for employer-sponsored insurance—that is, coverage that you get through your job. That’s still the way that most working-age Americans get insurance, even though it gets far less attention than coverage in the new insurance exchanges. The information comes from the annual Kaiser/HRET survey of employers, which is pretty much the authority on these issues. Its main finding: This year, the average annual price of a single person’s coverage is $6,025 and the average annual price for a family policy is $16,834. (Those are the full prices for coverage, including the portion that employers pay directly.)

That’s a lot of money, obviously. But the cost of the family policy is only 3 percent higher than it was last year, and the cost of the single policy rose by even less. That’s pretty close to increases in wages and prices, which is another way of saying that, relative to living standards, employer-sponsored insurance didn’t actually get more expensive last year. That’s pretty remarkable, given how quickly these premiums sometimes went up in the past. From a press release accompanying the report:

This year’s increase continues a recent trend of moderate premium growth. Premiums increased more slowly over the past five years than the preceding five years … and well below the annual double digit increases recorded in the late 1990s and early 2000s.

ESI premium increases via KFF/HRET

Still, most people don’t care about their premiums only. They also care about their out-of-pocket expenses—the co-payments and deductibles they have to pay directly, anytime they buy a prescription, see the doctor, and so on. The survey found that deductibles and co-payments didn’t rise much this year, but they’ve gone up a bunch in previous years:

OOP increases, via KFF/hRET

“The relatively slow growth in premiums this year is good news for employers and workers,” says Drew Altman, president of the Kaiser Foundation, “though many workers now pay more when they get sick as deductibles continue to rise and skin-in-the-game insurance gradually becomes the norm.” 

What to think about this? Generally speaking, it’s a positive development when premiums aren’t rising too quickly, since it means that workers have more money in their paychecks. Shifting more costs onto employees is a more complicated issue. Some would argue that’s a good thing, because it makes workers more careful about how they consume health care; some would argue that’s a bad thing, because it means people with serious medical issues are bearing more of their costs directly. It’s possible to believe both things, and think a lot depends on the details of how plans are structured.

One thing seems clear, though: Critics of the Affordable Care Act insisted it would cause employers to jack up premiums. There’s no evidence of that happening. And of course this data is consistent with all the other recent data we’ve gotten on health care spending under Obamacare. National health care spending, the amount of money we spend as a country, is rising at historically low rates. Premiums inside the new Obamacare exchanges, where people buy insurance on their own, are generally rising at moderate rates and in some cases declining, which is highly unusual.

It’s hard to say exactly how much Obamacare has to do with these changes. But it makes the critics’ arguments look awfully shaky.