Colorado employers will pay an average of 10.9 percent more for health insurance in 2014 than 2013, a dramatic upward climb after two consecutive years of reduced cost increases, according to a study from insurance benefits consultant Lockton Cos.
The reason for the price escalation is twofold, said Bill Lindsay, president of Lockton Benefit Group in Denver and author of the survey. First, prices on services such as hospital and prescription-drug costs will continue to rise as they have in past year, though at greater rates than predicted elsewhere in the country.
But that will combine next year with a new slew of mandates on minimum insurance benefits required by the Affordable Care Act, as well as a 2.25 percent federal tax on self-insured plans. Those two alone will combine to increase employer costs by at least 5.25 percent, Lindsay said.
“Health care costs are going up for all of the above reasons — hospital construction, pharmaceutical costs, the aging population,” Lindsay said. “But we know the ACA by itself is going to add to the cost.”
Such double-digit-percentage price increases were common for the first 11 years of the 21st century, but the increases fell to 9.4 percent in 2012 and 7.4 percent in 2013 in the Lockton survey. Health reform advocates trumpeted a provision of the federal bill that triggered government reviews for all premium hikes of more than 10 percent as a primary reason for the decline.
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