Associated Press | Companies that offer employee health
insurance expect another steep jump in medical costs next year, and
more will ask workers to share a bigger chunk of the expense, according
to a new PricewaterhouseCoopers report.
For the first time, most of the American workforce is expected to have
health insurance deductibles of $400 or more, the consulting firm said
in a report released to The Associated Press. Two years ago, only 25
percent of companies participating in the annual
survey said they asked employees to pay deductibles of $400 or more.
That grew to 43 percent in 2010 and is expected to pass 50 percent next
year.
Deductibles are the annual amount a patient pays out of pocket for care before insurance coverage starts. They are generally separate from co-payments and coinsurance.
Employees who are asked to pay more through things like higher deductibles help keep cost growth in check because they use less health care.
The health care reform law passed by Congress and then signed by President Obama in March has just started to unfold and will have little impact on costs next year, said Michael Thompson, a principal with PricewaterhouseCoopers.
“In general, it’s a continuation of a fairly high rate of medical inflation,” he said.
PricewaterhouseCoopers found that medical costs are expected to rise 9 percent next year. But this doesn’t mean workers will see their monthly premiums jump by the same amount.
Employers typically try to soften the impact of a cost increase by absorbing some of it, changing insurance plan designs or asking employees to pay higher deductibles or a larger coinsurance percentage.
For instance, a medical cost increase of more than 9 percent was forecast for 2009. But the average annual premium rose only 5 percent for family coverage that year and stayed flat for single coverage, according to a separate study from the Kaiser Family Foundation.
The 9 percent medical cost increase projected in 2011 is actually slightly smaller than the 9.5 percent jump PricewaterhouseCoopers is seeing this year. Thompson said several top-selling drugs will lose patent protection next year and become exposed to lower-cost generic competition. That will help temper the increase.
The PricewaterhouseCoopers report also found a steep drop in the percentage of employers that subsidize retiree health coverage. It said only 22 percent of employers with more than 5,000 workers subsidized retiree coverage after age 65 this year. That’s down from 37 percent in 2009.
“It’s a major cost and one that employers have for years now been moving away from,” Thompson said.
PricewaterhouseCoopers compiled its report by analyzing e-mail survey results from 674 companies in 30 different industries across the country. Most of the companies participating had 1,000 employees or more. The firm also interviewed health plan executives and reviewed analyst reports.
Because the health care reform is comming the insurance companies are trying to make up their lost profits until their think tanks can find another way to take out hard earned money out of our pockets. Older people this will also be an excuse for the business world to find a reason to fire the older worker becausethey will be using more insurance since they are older. Just a thought.
Where can I sign up for the $400 deductible plan? My deductible for this year is $3000 – the only plan choice that was affordable.
The only thing that would have brought costs down was
TORT REFORM, but you’d be silly to think obama would
go against his lawyer buddies, who become rich at the expense of the sick or those trying to help them.
Unemployment will go higher because of this bill.
I know I’ll probably be laying people off, not even
thinking of hiring anyone until I know what the costs
are going to be. I’ll never buy a GM car, I will never
donate to the poor anymore since they are mostly obama fans
waiting for more of a hand out from the goverment.
That’s what happens when you elect a community organizer,
elitist scumbag without any experience. But then, I hope
people are enjoying the change, along with the transparency and bipartisianship. Funny stuff. And they say Bush lied.
Get used to it folks. Adding over 30 million uninsureds to the plan; SOMEONE has to pay for it. This is probably the effect of adding the “up to 26 year old dependents”, to the roles that the bill calls for next year. I am surprised it is below 10%. The insurance company only writes the check; we ALL pay the bill either in lower wages or increased premiums.
Go figure. They make companies take away the life time max. They then allow kids to be on their parents health care until 26. (I did not know I was a kid at 26.) They think it is going to help. Those 2 things alone are costing the companies a ton of money and they will pass it right onto the employee.
Thanks Obama, we really appreciate it.
DO NOT panic. The big insurance companies will sort this out. Let the market have it’s way. And for heaven’s sake just lay down and die if you have to. Better dead than socialist.
Another consideration: Many large companies are thinking about no longer offering health care coverage to their employees, beginning next year. They would save a considerable sum of money by paying the government the penalty instead of paying most of employees’ health care coverage, forcing employees to find and pay for their own coverage.
Pure speculation. The lack of HC coverage by employers turns away a lot of prospective employees. There either has to a financial incentive (so that employees can get their own insurance), or employers have insurance as a benefit. If I’m the employer, I’m offering the benefit, but I’m also investigating the various HC plans to keep my costs competitive.
Pure speculation. The lack of HC coverage by employers turns away a lot of prospective employees. There either has to a financial incentive (so that employees can get their own insurance), or employers have insurance as a benefit. If I’m the employer, I’m offering the benefit, but I’m also investigating the various HC plans to keep my costs competitive.