Health insurance up again

The New York Times' health industry reporter Milt Freudenheim reported on the rise of health insurance costs last week. It's up "just" 6.1 percent, a bit less than three times the rate of inflation. It has brought the average cost of insurance for a family to $12,106. This is key:

Because doctor and hospital costs continue to rise at an even faster rate, the modest slowdown in insurance inflation mainly reflects cutbacks in coverage by many health plans, which have found ways to make employees pay more for their care. Industry experts said that without those measures, premium costs would have risen by 9 percent or more.

Kaiser's report includes results from a survey of private and public employers.

The article is a good source of factoids, including:

• Health costs have increased 78 percent since 2001, more than four times the pace of prices and wages.


• The 2007 increase was the smallest annual rise since 1999, when health premiums jumped 5.3 percent.


• Insurance company profit margins have been running at 6 percent to 7 percent.

Regarding health savings accounts, they found:

• 3.8 million workers are enrolled in HSAs. That's 5 percent.


• Almost one in five large employers currently offer some sort of health savings option.


• Only about half of the employers that offer HSAs contribute to their workers' plans.

Then there was this: "Kaiser did not try to project 2008 costs for health premiums. But research houses are forecasting increases for next year that include 6.7 percent by Mercer Health and Benefits; 9.9 percent by PricewaterhouseCoopers; 10.5 percent by the Segal Company; and 11 percent by AON Consulting."

I'd say Kaiser was right not to try to project. If the drumbeat for change keeps up, insurance companies will not raise rates much. Hell, they might even freeze the rate increases, eat some losses. Cost of doing business.