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California job-based health insurance costs grew more slowly after Obamacare


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This week, the headlines have been filled with angst over the increase in premium prices for 2017 insurance plans purchased through the Affordable Care Act. Here in the Golden State, premiums for Covered California plans are increasing an average of 13.2 percent.

But nationwide, most people get their insurance through their jobs, not through a state or federal exchange, and prices in the employer-sponsored insurance market tell a different story.

A new report from the Commonwealth Fund finds that if you're a single person in California and you get your health plan through your job, your health insurance costs have increased at a much slower pace in the five years after the 2010 passage of the Affordable Care Act, compared with the five years before it.

Consider this: In California between 2006 and 2010, single employees' contributions to their premiums increased an average of about 12 percent each year. But between 2010 and 2015, employees' share of their premiums increased by an average of about 1 percent each year.

Nationwide, employees' contributions to their premiums also slowed: They increased about 6.7 percent each year between 2006 and 2010, and went up about 4 percent annually between 2010 and 2015.

Then consider this: Single Californian employees' deductibles increased by an average of about 11 percent each year between 2006 and 2010, and about 6 percent each year between 2010 and 2015.

Nationwide, deductibles for single people enrolled in job-based insurance plans were steadier: They increased an average of 9.5 percent between 2006 and 2010, and about 8.5 percent between 2010 and 2015.

But if insurance costs are growing at a slower pace, why do many American employees still feel like they're spending a larger and larger chunk of their paychecks on health care?

The problem, according to the Commonwealth Fund, is that people's incomes aren't keeping pace with rising health care costs. Continued slow wage growth, it says, means people still contributed more to their premiums as a share of income than in earlier years.

This is a nationwide trend, and we see it in California, too.

Let's break this down: In California in 2006, the average cost of a single employee's premium and deductible comprised 6.6 percent of his income, or in this case, the median household income. Fast forward to 2015, and health insurance costs made up almost 10 percent of the median household income.

So why are the average costs associated with job-based insurance not growing as quickly as they once were?

Sara Collins, a Commonwealth Fund vice president, says she doesn't know exactly what's causing California's job-based health care premiums to grow more slowly. She suspects it's not linked to the Affordable Care Act, but rather to subtle changes in employer benefits.