Rate of health premium increases slow in Hawaii, report shows

On the heels of the Obama administration revealing Affordable Care Act insurance coverage will increase in cost by 25 percent on average in 2017, the Commonwealth Fund announced the rate of increase in costs for such premiums has slowed — and Hawaii is a shining example.

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On the heels of the Obama administration revealing Affordable Care Act insurance coverage will increase in cost by 25 percent on average in 2017, the Commonwealth Fund announced the rate of increase in costs for such premiums has slowed — and Hawaii is a shining example.

The report shows families spent an average of 10.1 percent of their income on health insurance in 2015. That amounts to $6,422.

Ironically, the expected percent increase in costs for the Affordable Care Act coverage is largely offset by a boost in subsidies, the administration said. And, the cost of Affordable Care Act premiums dropped in most states.

“At the state level, 33 states and the District of Columbia experienced slower premium increases for single policies since 2010 compared to earlier years,” the Commonwealth Fund reports. Hawaii was among the states with the slowest rate of insurance premium increases.

The percent of employee premium contribution for single coverage in Hawaii went from 4.9 percent from 2006-10 to 5.2 percent from 2010-15, compared with national numbers dropping from 4.7 percent in 2006-10 to 3.8 percent from 2010-15.

But salary increases have not kept up with insurance premiums, which is compounded in states with lower-income residents subjected to higher-cost premiums.

Although many workers were expected to switch from employer-based health insurance plans, that hasn’t happened as frequently as predicted.

That means most workers are still insured by health policies they sign up for through their jobs.

Health insurance premiums have not decreased. But the rate of how fast the cost increases has dropped in most states, including Hawaii.

And Hawaii’s system might be one federal policymakers should consider at the national level, said Sara Collins, a co-author of the Commonwealth Fund’s report.

Hawaii law requires businesses to offer health insurance.

“This clearly makes Hawaii an outlier in these data. It could potentially suggest public policy options,” Collins said.

Although premium rate increases have slowed, workers are “facing a bigger burden today than they did before,” said David Radley, Collins’ co-author.

The report says many families are spending, on average, a bigger share of their income on health care than they were before 2010. That is because median incomes, despite their recent surge, have not kept pace with health care costs.

For more information, the Commonwealth Fund’s report, titled “The Slowdown in Employer Insurance Cost Growth: Why Many Workers Still Feel the Pinch,” is available at www.commonwealthfund.org/

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(http://www.commonweathfund.org/publications/issue-briefs/2016/oct/slowdown-in-emploer-insurance-cost-growth)

Email Jeff Hansel at jhansel@hawaiitribuneherald.com.

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