
Health insurance is helping cool inflation. But 'it's not a very good reflection' of what people pay, cautions economist
In an environment of high inflation, health insurance costs are doing the opposite: They've begun to deflate, and are poised to continue dropping each month until fall 2023, economists predict.
Health insurance prices fell by 4% in October and 4.3% in November, according to the consumer price index, a key measure of inflation.
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By comparison, the average price for all U.S. goods and services rose 0.4% and 0.1% in October and November, respectively.
The health data reflects factors like consumers' insurance premiums and benefits paid by insurers.
Health insurance costs had been rising steadily, within a band of roughly 1.5% to 3% a month since October 2021, according to CPI data.
Now, costs are poised to fall about 4% a month through September, said Jonathan Church, an economist at the Bureau of Labor Statistics, which issues the CPI data.
However, that deflationary dynamic may not square with consumers' actual financial experience with health premiums. That decline in prices on paper is due to the unique way in which the BLS calculates health insurance inflation, economists said.
"It's not a very good reflection of prices consumers are going to be seeing," said Andrew Hunter, senior U.S. economist at Capital Economics.

Why health insurance prices are hard to quantify
Pandemic health trends flipped the inflation readings
The BLS updates its profit-related calculations once a year, in October.
The dynamic helps to temporarily hold down monthly inflation readings, economists said.
"It doesn't change the topline story that inflation is moderating," Zandi said. "It just moderates that story to some degree."
Consumers may see 'higher increase' of 2023 premiums
U.S. employers expect their average health insurance costs per employee to rise 5.4% in in 2023, following a 3.2% jump in 2022, according to Mercer.
Consumers who get health insurance through the workplace paid $1,327 in health premiums for single coverage in 2022 and $6,106 for family coverage, KFF said. The level is similar to amounts in 2021.

Premiums for Affordable Care Act plans are estimated to jump 4%, on average, in 2023, according to the Department of Health and Human Services.
It would be the first time in many years when ACA premiums rise nationwide, with insurers citing rising prices and rebounding utilization for the bulk of the increase, KFF said. However, most consumers receive a subsidy for ACA premiums and are "largely shielded" from the increase, KFF said.
The standard monthly premium for Medicare Part B is roughly $165 in 2023, a decrease from about $170 in 2022, according to the Centers for Medicare and Medicaid Services. But the average monthly premium for Medicare Part D for prescription drugs is estimated to be $43 next year, a 10% increase from 2022, KFF said.
Source: https://www.cnbc.com/2022/12/14/heres-how-health-insurance-is-helping-to-cool-inflation.html