CFCE Blog

Health Insurance Premium Inflation Still Strong

By Loren Kaye
Posted 9/11/2007

The Kaiser Family Foundation today released a national survey of health insurance premiums.  It reported that health insurance premium inflation decreased again in 2007, to an annual rate of 6.1 percent, down from 7.7 percent in 2006 and a recent high of 13.9 percent in 2003.  The 6.1 percent premium inflation is the lowest rate of increase since the 1994 through 1999 period of highly effective HMO utilization controls.

 

The California figures will probably not be out for another couple months, but have generally tracked the national trends.  That is, during the late 1990s, California premium increases were generally low, and then rapidly accelerated through 2003, and dropping since then.  However, while the rate of increase for insurance premiums nationally went down between 2005 and 2006, in California during the same period the trajectory reversed course and started to rise again.  So it is not a sure thing that just because the rate of premium increases in 2007 went down nationally, that the same trend will occur in California.

 

Also, note that the national premium increase at 6.1 percent was still more than twice the rate of increase in overall inflation (2.6 percent) and two-thirds higher than workers’ earnings (3.7 percent).

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