Health Benefits In 2006: Premium Increases Moderate, Enrollment In Consumer-Directed Health Plans Remains Modest
By Gary Claxton, Jon Gabel, Isadora Gil, Jeremy Pickreign, Heidi Whitmore, Benjamin Finder, Bianca DiJulio, Samantha Hawkins
Health Affairs
September 26, 2006
Abstract
Based on a survey of 2,122 randomly selected public and private employers, this paper reports on the state of employer-sponsored health insurance in spring 2006, including recent changes. Premiums increased 7.7 percent from spring 2005 to spring 2006 and have risen 68 percent since 2001. About 4 percent of workers are enrolled in high-deductible health plans with savings options. The percentage of workers covered by their own employer did not statistically change from 2005 to 2006.
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.25.w476
Comment:
By Don McCanne, MD
Some reports of this study suggest that this is good news because employer-sponsored premium increases are now down to only twice the rate of inflation, as if a “down” isn’t an “up.”
Remember the magic of compounded interest? Modest amounts of funds, with time, grow to very large amounts not only because of the interest, but also because of the interest on the interest. With insurance premiums, not only are the rate increases high, but the rates are applied to prior high rate increases, compounding year after year. That has resulted in a rate increase of 68 percent since 2001.
Although this report is about increased costs of insurance premiums, the real issue is the increase in actual health care costs. Our current pseudo-market mechanisms of slowing spending increases have been ineffective. It is not as if we don’t know what can be done. Establishing a public monopsony would enable us to obtain value in health care purchasing though single payer mechanisms. What is astounding is that we continue to tolerate these outrageous cost increases with a complacency that the market will take care of it for us.
Same question as before: Are we a nation of dimwits?