Health care costs can't grow faster than GDP forever . . . so a 7%-10% annual growth rate in perpetuity is not a reasonable assumption.
But if you're only paying $300 / month, you can pretty well guarantee that your rate will continue skyward at least until it reaches the average cost of medical care in the U.S., which Kaiser estimates is $7,400 per person each year.
Three things in response:
1. Maybe health care costs can't grow faster than GDP in perpetuity, but they can rise faster for a very, very long time (and they have). See the link below for a chart that shows that health care spending outpaced inflation by over 3% per year between 1960 and 2000. Another source I just read reported that in 1980, health care expenditures in the US were 8.8% of the GDP, and in 2000, they were 13.2% of the GDP. I doubt if these numbers have leveled out since 2000, though I haven't looked up the data.
http://content.healthaffairs.org/co...mages/data/hlthaff.w2.83v1/DC1/Altman_Ex1.gif
So 7-10% annual cost increases do reflect the aggregate history of the last 50 years. Given this history, it doesn't seem like such an unreasonable assumption to me.
2. These aggregate costs fail to fully reflect cost increases to individual early retirees. The cost to individual retirees grow faster than these averages because individuals age (hopefully, anyway -- it does beat the alternative). This pushes them into higher premium categories. The cost of health insurance rises by about 5% per year on our current private insurer's rate sheet between the ages of 49 and 64 via ~30% increases at age 50, 55, and 60.
3. Like taxes, health insurance rates vary dramatically from state to state. Some states have guaranteed issue laws which require insurers to accept every applicant regardless of preexisting conditions. In those states, health insurance rates are much higher for everybody, as insurers must take those in poor health into their pool. Oregon does not have such a requirement, and insurers have the right to reject applicants based on their medical history (and they do -- my wife was rejected by BCBS for weighing too little at 5'6"/113). I'm not arguing the superiority of one system over the other, just saying that U.S. averages are kind of meaningless when from state to state, the same person can experience a 2x or 3x difference in the premiums.