Rising health insurance and other health care costs have business owners, workers and economists worried about their impact on the US economy, reports newstimes.com.
The Kaiser Family Foundation reported this week that the average health insurance premium for a family rose to $15,073 in 2011. According to the U.S. Census Bureau, more than 7 million Americans don't even earn $15,000 a year.
In Connecticut, the Insurance Department said it was looking at requests from insurers asking for increases of 9 to 13 per cent for next year.
While insurance rate requests are averaging 9 to 13 per cent, it doesn't mean the insurers are getting those amounts. Last week, the state Insurance Department cut Anthem Blue Cross's 12.9 per cent rate increase for individual policies to 3.9 per cent.
United Health's Oxford company saw its rate hike request for its 2012 small business customers pared to 11.6 per cent from 14.4 per cent this month. Anthem and Aetna both have small business rate requests filed as well, with decisions still to be made. Requests on larger group policies have not yet been filed.
Paul Lombardo, a Connecticut Insurance Department actuary, said the department has been able to trim rates because people aren't seeing doctors in this economy.
Lombardo said people are skipping treatment for things they can live with, while the ailments that have to be looked at by doctors, such as heart disease, are more serious and more costly.
He also said rates are being reined in by new health care laws. Any rate request of 10 per cent or higher triggers an unreasonable rate review that is forwarded to U.S. Health and Human Services. That, he said has curbed some hikes.
Lombardo said the rise in rates doesn't mean the insurers are pocketing more money in profits. He said the payouts on policies have probably kept pace with the rise in premiums. Employers are also worried about the increases.
This jump in health care costs worries economist Donald Klepper-Smith of DataCore partners. "If we can't get a handle on this, this could be a major catalyst for further job weakness. Businesses aren't going to hire new workers if they have to cough up big money."
Klepper-Smith said besides putting a brake on hiring, the current trend in health care costs is also a public health and social issue as people effectively get priced out of access to care as they can no longer afford co-pays or deductibles.