Price of health insurance not going down, yet

Stethoscope lying on money

TEXT OF STORY

Bob Moon: Like millions of employees across the nation around this time of year, we at Marketplace got "the talk" this week. This is when workers sign up for health insurance plans. We just found out our premiums are going up pretty significantly. And it's not just us.

The National Business Group on Health -- a body that represents big employers -- estimates premiums for company-paid plans will rise by roughly 9 percent this year.

But wait a minute. Didn't we just pass a huge health care reform bill that was supposed to help people afford health care coverage? We sent card-carrying health insurance customer Stacey Vanek Smith to check it out.


Stacey Vanek Smith: Even doctors are paying more for health insurance. David Taragin is a neurologist in Silver Springs, Md. Last year, his premiums rose 35 percent and this year...

David Taragin: Our premiums have gone up about 13.5 percent, but the real kicker is that the coverage levels have dramatically dropped.

Meaning more out-of-pocket costs. Health insurance premiums have more than doubled in the last decade. Industry analyst Robert Laszewski says much of the increase has to do with costly new treatments and overhead. And, he says, the bad economy is making things worse.

Robert Laszewski: In poor economic times you tend to have the sicker people keep their coverage and the healthy people drop their coverage. And as a result, you tend to get higher rate increases.

Laszewski says cost-conscious employers are foisting more of that burden onto employees. But wasn't health care reform supposed to lower our costs?

Alan Garber: Most of the fixes aren't in place yet.

That's Alan Garber, director of the Center for Health Policy at Stanford. He says the parts of health care reform that could help push premiums down don't go into effect until 2014. Like the individual mandate, which requires everyone to buy health insurance.

Garber: The reason for this provision is to make sure healthy people purchase health insurance so that when you figure out the premium for a group of insured people, it can be relatively low.

That's for so-called health care exchanges, where people will be able shop for health insurance -- in 2014. Until then, you can probably add rising health insurance premiums to that old saying about death and taxes.

In New York, I'm Stacey Vanek Smith for Marketplace.


Moon: By the way, we've got a comprehensive look at some of the changes in store for health care on our website.

About the author

Stacey Vanek Smith is a senior reporter for Marketplace, where she covers banking, consumer finance, housing and advertising.

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