Increased health spending most often translates to higher out-of-pocket costs for consumers in the form of premiums, deductibles and copays. The annual spending benchmark would require health care providers to limit spending growth to 3.5% next year, decreasing to 3% by 2029. Providers — including hospitals, doctors groups and health insurers — will have to submit spending data to the state to demonstrate that they are complying with the cap.
The cap is being tied to the average annual median household income growth. (Tap for details)
The goal of the cap is to prevent future prices from increasing uncontrollably. This year, health insurance premiums on the state’s Affordable Care Act Exchange increased an average of 9.6% statewide with double-digit increases in many regions. Personal health care spending shot up 60% between 2010 and 2020, reaching $405 billion, according to federal data. That’s $10,299 per person. Household health spending has also grown twice as fast as wages, according to the Kaiser Family Foundation.
In an effort to recognize how many Californians can’t pay for health care, the affordability office tied the cap to the average annual median household income growth, which has historically been about 3% over the past two decades.
This is an interesting way of handling everything. I’m curious to hear from anyone that could have any insight on how/if this could negatively affect medical research.
My premium had gone up $10 per month, each year for about 15 years, then last year it went up $50 per month. I won’t be able to keep up if it’s raised $50 per month every year going forward. I don’t even keep track of my deductible, it’s unattainable without a catastrophic event.