Healthcare Use May Temper Premium Hikes

Consumers may catch a little break when their health insurance policies renew. Lower-than-expected use of healthcare has helped push insurer earnings higher and that may temper how much they increase premiums.


Analysts and industry observers say people tend to hold off on elective surgeries and skip doctor visits after a deep recession, and that makes utilization grow more slowly. Insurers consider this trend when they determine what they will need to collect in premiums to cover future claims, and employers will likely use it as a bargaining chip when they negotiate prices of the plans that cover their workers.

This doesn’t mean consumers on a steady diet of rising premiums in recent years can expect a price drop.

“I think what it promises is some level of stability in rates,” said Dan Mendelson, CEO of the research firm Avalere Health. “It doesn’t promise that rates are going to go down or they are going to be flat, but it does predict that there shouldn’t be wild increases in rates.”

Healthcare use has slowed to a growth rate “we haven’t seen in many years,” said Robert Laszewski, a former insurance executive and now a policy consultant. He said this means premiums will keep rising, but at lower rates than recently.