In Largest Health Insurance Market, Premium Growth Slows

Jan 8, 2015

This shows the slowing growth of premiums for single coverage. In North Carolina, premiums for family coverage also slowed but not as much.
Credit The Commonwealth Fund

 In North Carolina, what businesses pay in health care premiums has been growing at a much slower rate since the Affordable Care Act passed. But that's not resulting in cheaper costs for most families, according to a report Thursday from The Commonwealth Fund, a private research foundation.

The report shines light on how premiums are changing in the health insurance market that impacts the most people – the employer market.

Cathy Schoen is the lead author of the report, which relied on federal government data.

“Overall the study finds that there has indeed been a marked slowdown in rate of growth of health care premium costs,” Schoen says. “It's occurred in the vast majority of states.”

In North Carolina, the average annual growth for family coverage was 3.3 percent from 2010, when Obamacare passed, to 2013. That's about half what it was in the seven years before Obamacare. The average annual growth for single coverage has slowed down even more, according to the report.

But Schoen says that's the total cost of premiums, combining what employers and employees pay.

“From an employee and family perspective, there may be little awareness that premium growth has slowed because the cost they pay directly for their share of premiums and for cost sharing has increased,” she says.

Employees who are single are benefiting somewhat in North Carolina. But the report shows that most employees with family plans are not benefiting – in fact, their share of premiums is growing faster.

“That'd be consistent with what we're seeing,” says Skip Woody, co-founder of Hill, Chesson and Woody, which helps North Carolina businesses decide what benefits to offer.

“They have slowly been focusing on: I'm going to pay less of the cost of family coverage, and I'm going to pay as much or more of the cost of single coverage,” Woody says.

He says Obamacare requires businesses to keep single coverage affordable, defined as less than 9.5 percent of that employee's wages.

But he points out that requirement is new, and this trend started years ago when the economy tanked.  

“As employers looked for ways to control costs - they needed to because their businesses weren't doing as well - so they adjusted benefits downwards,” Woody says. “They increased deductibles. They increased co-pays.”

Those are changes that decreased their premiums.

Although families may not see the savings, The Commonwealth Fund report is the latest evidence that health care costs are slowing. (Actuaries from the Centers for Medicare and Medicaid Services have also documented this trend.) 

A key thing to watch is whether that growth picks back up now that the economy has.