The Health Insurance Premium Creep

The Health Insurance Premium Creep

Brace for sticker shock: Your health care costs are on the rise.

A number of recent reports say consumers should expect escalating premiums, higher deductibles and other rising out-of-pocket costs this year, The Wall Street Journal reports.

The average premium for an individual plan meeting new Affordable Care Act requirements recently shot up to $274 a month—an increase of almost 40% over last year, according to insurance retailer EHealth. Other types of plans are facing even sharper jumps: Family plans, for instance, are up 56%, and now clock in at an average of $663 a month. (Although it's important to note that these rates don't yet factor in various government tax credits that could make coverage more affordable.)


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Workers with health insurance through their employers should also expect to see a hike because the cost of offering employee benefits is forecasted to jump 4.4% this year, according to a Towers Watson survey. That cost hike will shift onto employees: Towers Watson projects that workers will have to cover 37% of premiums in 2014—up from 34% in 2011.

Some critics blame the ACA for the higher costs, pointing the finger at provisions like requiring preventative care coverage. Others maintain that the rise is run-of-the-mill. "Employers have been facing increasing premiums for employees for many years, long preceding the health care law," the Centers for Medicare and Medicaid Services said in a statement.

What's a consumer to do? The Wall Street Journal offers a few pointers:

  • Touch base with HR: If you hold coverage through your workplace, and are having trouble affording increased deductibles and co-pays, your company's human resources department should be alerted. "They need to know when it's not working for an employee," Cheryl Fish-Parcham, deputy director for health policy at Families USA, told the WSJ.
  • Research marketplace options: Even if you currently have an employee plan, it's possible you might discover more affordable coverage on the health insurance marketplace, (The Obama administration recently announced it was extending its deadline to enroll yet again, this time to mid-April.)
  • Save strategically: If you have access to a tax-advantaged health savings account, like an FSA or HSA, socking away money into one of these funds could help you cover eligible health care costs throughout the year, including co-pays and prescriptions.


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