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Health insurance cost increases slow over past decade, report confirms

Posted On Mon, October 21, 2013

Though there has been a lot of talk about the potential of health insurance rates rising substantially as a result of the Patient Protection and Affordable Care Act - the law that requires all Americans to purchase coverage before 2014 - a new study suggests that the rate in which they've risen over the past 10 years is considerably slower than it has been in the past.

The analysis, which was conducted by health solutions firm Aon Hewitt, found that among employer-provided health insurance plans, premiums rose an average of 3 percent for large employers in 2013, down from 5 percent in 2012 and more than 8 percent two years ago.

However, the slowdown isn't expected to last into 2014. In fact, the poll found that healthcare premiums could rise by between 6 and 7 percent next year.

Tim Nimmer, fellow of the Society of Actuaries and chief healthcare actuary at Aon Hewitt, indicated that there are many reasons why premium growth is expected to grow faster in 2014.

"These include the lagged effect from the economic recession on health care spending and continued adjustments as employers and insurers phase out the conservatism that was reflected in earlier premiums due to uncertainty around economic conditions and healthcare reform," said Nimmer. "Additionally, employers and insurers will now be subject to new transitional reinsurance fees and health insurance industry fees."

Cost hike projections in 2014 lower for HMOs than PPOs
The cost increases forecasted depend upon the plan type that businesses offer, Aon indicated. For example, for preferred provider organization plans, referred to as PPOs, average healthcare costs per employee will be about $10,900, which is a 6.5 percent uptick. For health maintenance organization plans, also known as HMOs, they are projected to run about $11,700, up from $10,880 in 2013.

There are many ways in which consumers can save on health insurance. One of the easiest is by comparing insurance quotes. Comparison websites contain information on different policies that are available in whatever state an insurance customer happens to live in. They have details on what premiums are, as well as the deductible, or the portion of coverage that the insured person is responsible for paying.

Plans with higher deductibles tend to have cheaper premiums
Another way to save is by taking advantage of higher deductibles. These policies are ideal for people who are healthy and don't require many medical services in the typical year, such as for prescription medications or treatments that are performed in-home or in a doctor's office. It's important to be aware of just how costly these deductibles can be, though, as they may be hundreds of dollars for office visits or thousands for emergency room admissions.

Something else that health insurers offer are discounts on gym club memberships. If a policyholder already is a member of a fitness facility or is considering joining one, they may want to consult with their provider to see if they offer compensation. Some plans may contribute some, or all, of the cost of a yearly membership, as exercise is one of the best forms of disease prevention when combined with portion control and sensible eating plans.

Additionally, it's a good idea to check with one's healthcare provider about any specific coverage that they make available to people who have long-term conditions, such as asthma, high blood pressure or diabetes. Because these health issues are fairly common, policyholders may be able to take advantage of discounts on treatments or medications, such as cheaper nebulizers or prescription drugs.

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