First, the good news: Numbers released this week by the Kaiser Family Foundation show that the average premium for family coverage under employer-sponsored health insurance plans rose just 4 percent this year, half the average annual increase of 8 percent over the past decade and less than half the 9 percent spike last year.
The cost for family coverage averaged $15,745. As in recent years, family premiums at small firms of fewer than 200 employees were lower, on average, than for plans offered by large employers ($15,253 vs. $15,980).
Now the bad news: Analysts say the lower premiums are hardly the result of widespread price modification in the health care industry but instead reflect that Americans are forgoing medical care and are adapting to cost-sharing and less generous coverage terms amid a shaky economy.
The recession and our slow recovery have been major factors in containing health care premiums. Before the bust, double-digit annual increases were common. Since the bust, workers have had less disposable income for things like elective surgery. In addition, employees have had to shoulder a greater share of their employer-based health insurance costs, forcing some to opt for higher deductibles to keep premium costs down.
Some analysts view last year's premium spike as an overreaction by insurers who expected health care use to jump along with the economic recovery. "I didn't think I would see utilization this low," admits Janice Knight, an executive for Health Care Service Corp., operator of Blue Cross Blue Shield plans, in a New York Times story.
This year's numbers also may reflect ongoing uncertainty about health care reform, which has become a key campaign theme in the upcoming presidential election. Employers and insured Americans alike remain confused about the impact that the new health insurance markets, called exchanges, and the new underwriting criteria that will accompany them may have on their pocketbooks come 2014. Republican presidential candidate Mitt Romney has vowed to "repeal and replace" the Obama health care reform law if elected, making it even harder for businesses and insurers to plan ahead.
The bottom line: We're paying more for coverage we're using less. And the question that remains is, which was the real aberration -- last year's 9 percent jump in premiums or this year's 4 percent increase?
What do you think?
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