Group health insurance premiums rose about 5% this year compared with last year. This is the lowest premium increase in several years. But since nothing significant has been done to curb the rise in health care costs (the driving force behind rising health insurance premiums) the lower-than-inflation premium increase isn’t likely to become a trend.
One reason for the lower premium increases is that small group health insurance policies are starting to look more like the products popular in the individual health insurance market – higher deductibles, and an increased focus on HSAs. According to John Martie, President and General Manager of Anthem Blue Cross Blue Shield in Colorado, 40% of Anthem’s new policies in Colorado this year have been high deductible, HSA-qualified plans.
For healthy families, high deductible plans with HSAs will work just fine – especially if the employer funds the HSA. But for families with extensive medical care or chronic conditions that require them to meet their deductible every year, the shift towards more basic health insurance isn’t likely to be a welcome change. It all comes down to affordability and access to care. If a $3000 deductible means that a person isn’t able to afford necessary care, than the health insurance coverage isn’t working for that person. Obviously in a worst-case scenario, paying $3000 is a lot better than trying to come up with the money for a six figure hospital bill. But for the day to day things, people who don’t have a fully-funded HSA (and even some who do, but would rather save the money) are less likely to seek medical care when they need it. And when small problems go untreated, they’re more likely to turn into big problems down the road. And that’s not good for anyone – employees, employers, or health insurance carriers.
Once HB1355 takes effect in Colorado in January, we’re likely to see even more small businesses switching to lower-cost, high deductible health insurance plans. Although a move to higher deductibles does serve to keep health insurance premiums affordable, it’s a difficult change for families who have gotten used to their comprehensive plans. HSAs will eventually lead to more transparency in health care and more savvy consumers. But it will be a bumpy road for families adjusting to the change.
