CPI: Health Insurance Premiums Jump
This morning’s Consumer Price Index showed a significant jump of 1.1 percent in health insurance premiums in January, versus a flat CPI for all items and a 0.3 percent rise in CPI for all items less food and energy. Prices for physician services increased only 0.1 percent, less than prices for other services.
This corroborates the Producer Price Index, which showed a slight decrease in physician prices. However, the divergence in price increases for prescription drugs in the CPI and PPI is continuing. Prescription prices in the CPI increased by only 0.5 percent, in line with medical care overall.
Over the last twelve months, prices for medical care still increased a little more than twice as fast as the CPI for all items, and 0.7 percentage points more than the CPI for all items less food and energy. Relatively speaking, medical inflation is not as tame as some others suggest.
Further, over the past twelve months, price increases for health insurance and hospital services stand out significantly more than price increases for prescription drugs. (See Table I below the fold.)
It is interesting that the biggest gainers were:
1) health insurance (1.1%)
2) eyeglasses and eye care (1.0%)
3) medicinal drugs (0.7%)
4) inpatient hospital services and (0.6%)
5) care of invalids and elderly at home (0.5%)
Home care may indicate a tightening labor market.