By STEPHEN KRUPA
As employees participate in open enrollment for their company’s health insurance enrollment next year, it’s clear they should make a point of participating in their employer’s enrollment information meetings, not merely pick last year’s coverage. Partly because of the implementation of President Obama’s health care overhaul plan, U.S. workers are expected to pay average premiums of $2,200 in 2011 – an increase of 12.5 percent, the biggest in four years, according to human resources consulting firm Hewitt Associates.
Increases in health care premiums are certain to continue increasing in coming years at double-digit rates, with inflation further exacerbated by the entry of 32 million uninsured Americans into the healthcare system. This will speed the transformation of insurers from underwriters of medical risk to managers of medical risk, a process inevitably accompanied by higher prices.
Annual healthcare inflation — and hence baseline premiums — have been rising 8-12 percent annually for two decades, and there is no reason to expect this to change anytime soon. It could actually increase as provisions of healthcare reform – such as the mandated removal of pre-existing conditions – become law. Some of these provisions, such as the elimination of a dollar amount of health benefits in a given year and the fact that children can now stay on a parent’s health plan until age 26, help explain the likely spike in health insurance premiums next year.
