Monday, June 21, 2010

Nine percent spike in employer health costs expected in 2011

We're all familiar with the argument that in the long run health care reform is supposed to be reining in the cost of health care in the U.S. However, few predicted we'd see those savings in the short run, and sure enough, U.S. employers can expect medical costs to increase by nine percent in 2011, according to the annual "Behind the Numbers: Medical Cost Trends 2011"  survey published by the PricewaterhouseCoopers LLP Health Research Institute (registration required to download report).

The good news, if you want to call it that, is that this increase is slightly lower (0.5 percent) than the jump reported by last year's survey.

The report includes findings of the PwC Health and Well-Being Touchstone Survey of more than 700 employers from 30 industries, as well as interviews with health plan actuaries and other executives whose companies provide health insurance for 47 million American workers and their families.

What design changes can we expect in 2011? Expect increased cost-sharing, for one thing. For the first time, PwC reports, the majority of the American workforce is expected to have a health insurance deductible of $400 or more, as more employers return to "indemnity style" cost-sharing by raising out-of-pocket limits, replacing co-pays with co-insurance and adding high-deductible health plans. Improving wellness programs is also high on the list of changes planned for 2011.

Will the Affordable Care Act lower health care costs in the long run? There's much debate to be found on that point--for starters, go here, here, and here.


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