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Move Here for Lower Health Care Insurance Premiums

By Hal M. Bundrick

NEW YORK (MainStreet)¿When it comes to the cost of healthcare, we'll take good news wherever we can find it. And while this update is not worthy of a "breaking news" graphic, Aon Hewitt says health care insurance premium rate increases are at their lowest in more than a decade.

So yes, premium rates are still going up, just not quite as quickly.

The average health care premium rate increase for large employers in 2013 was 3.3%, down from 4.9% in 2012 and 8.5% in 2011. In 2014, however, average health care premium increases are projected to bounce back to the 6% to 7% range.

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"There are many factors that contributed to the lower rate of premium increases we saw over the past two years that we don't expect to continue in the long-term," says Tim Nimmer, chief health care actuary at Aon Hewitt. "These include the lagged effect from the economic recession on health care spending and continued adjustments as employers and insurers phase out the conservatism that was reflected in earlier premiums due to uncertainty around economic conditions and health care reform. Additionally, employers and insurers will now be subject to new transitional reinsurance fees and health insurance industry fees. While we are seeing pockets of promising innovation in the health care industry, we expect to see 2014 premium increases shift back towards the 6% to 7% range overall."

And now the bad news

But of course, there is bad news. The money out of your pocket -- for copayments, coinsurance and deductibles -- increased 12.8% ($2,239) in 2013, compared to a 6.2% bump in 2012.

The analysis reports the average health care cost per employee was $10,471 in 2013. That is expected to rise to $11,176 per employee next year.

To put the rising costs in perspective, over the last decade your share of health care expenses -- including employee contributions and out-of-pocket costs -- will have increased almost 150%.

Where you live matters

In 2013, major U.S. markets that experienced rate increases higher than the national average included Los Angeles (6.9%), Orange County (6.9%), Washington DC (5.3%) and San Francisco/Oakland/San Jose (4.8%).

Meanwhile, New York City (1.6%), Milwaukee (2.1%) and Atlanta (2.4%) experienced lower-than-average rate increases in 2013. Can you learn to like cold weather? Minneapolis actually saw a decrease in health care insurance premiums, at -0.1%.

--Written by Hal M. Bundrick for MainStreet

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