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Employer Health Costs To Rise Nearly 9 Percent This Year, Survey Finds

McClatchy Tribune News Service National News

Employer Health Costs To Rise Nearly 9 Percent This Year, Survey Finds

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By Chad Terhune, Los Angeles Times

LOS ANGELES—Employer health care costs are expected to rise nearly 9 percent in 2014, a slight improvement over recent years, according to a new survey.

However, that modest decline doesn’t offer much relief to companies and their employees, who are seeing health insurance costs take a bigger bite out of their paychecks.

“Even though the decline is good news, most (health) plan sponsors still find 8 percent to 9 percent cost increases unsustainable,” said Harvey Sobel, a principal at Buck Consultants, a benefits consulting company that surveyed 126 insurers and health plan administrators nationwide.

Those companies surveyed provide health benefits to 119 million people.

The report released Thursday found that costs for preferred-provider organization, or PPO, plans are expected to rise 8.7 percent this year. That’s down from 9 percent last year.

HMO plans should increase 8.6 percent, down just slightly from the previous year, according to Buck Consultants.

Some insurers surveyed cited patients’ lower use of medical care as the primary reason for the decreases.

“This may be a result of the economic slowdown and its impact on consumers’ willingness to seek medical treatment,” Sobel said.

Overall, U.S. health care spending has been growing at historically low levels from 2009 to 2012, federal data show.

Many health economists and industry officials have attributed the slowdown primarily to lingering effects of the Great Recession, when millions of Americans cut back on medical care.

But the Obama administration and other experts have pointed to fundamental changes in health care reimbursement and the delivery of care spurred by the Affordable Care Act.

Even with the slowdown, the rise in health premiums continues to outpace inflation and wage growth.

For 2013, the average total cost for a family health plan rose 4 percent to $16,351, according to a closely watched survey by the Kaiser Family Foundation and the Health Research & Educational Trust.

The typical employee’s share of that premium was $4,565, up about 6 percent from 2012. But the employer’s share of the premium increased just 3 percent, a further sign that employers continue to shift more medical costs onto their workers.

Photo: ProgressOhio via Flickr

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1 Comment

  1. Independent1 May 15, 2014

    “Many health economists and industry officials have attributed the slowdown primarily to lingering effects of the Great Recession, when millions of Americans cut back on medical care.

    But the Obama administration and other experts have pointed to fundamental changes in health care reimbursement and the delivery of care spurred by the Affordable Care Act.”

    I have to go along with the Obama administration on this one. I find the notion many economists (according to the article) have that the slowdown in healthcare costs as being related to the Great Recession; I find that more than a little convoluted. If fewer patients are choosing to have healthcare taken care of, the facilities that have fixed expenses based on the size of their operations would have to raise costs/patient in order to stay afloat – not reduce costs. And it seems to me that the patients choosing to delay healthcare, would most likely be those not sick and/or felt they were healthy enough to put off seeing a doctor or getting a procedure done; meaning that those being treated most recently would be the sicker/most costly people to treat – which would have been driving up costs even faster the 3-4 years, not reducing them.

    And I think the companies and people expecting healthcare costs to suddenly plummet are being totally unrealistic. it is going to take at least a few years, and more than few million more Americans to wake up and realize they need to get themselves insured, before enough patients needing healthcare can afford to have the treatment they need paid for; enough more paying patients to allow hospitals, doctors, labs and other healthcare providers to start dropping their costs because they won’t have to charge 3-5 times their costs for procedures & other healthcare they provide, in order to make up for the millions of nonpaying patients as they are having to do even today.

    Reply

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