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Expect health care premiums to go up 8% on average in 2009, about the same as this year. It marks the sixth straight year that the rise in premium hikes has slowed or held steady after peaking in 2003 at 14%.
But premium increases will accelerate into double digits in 2010 and beyond. Medical costs are going up at a faster pace after slowing for years because of concerted containment efforts, such as improved medical management of high-cost patients and generic substitution of prescription drugs.
One big reason for the jump is that employers are paying an ever greater share of the tab to treat the uninsured. When people without health insurance seek care in emergency rooms and elsewhere, the price of that care is at least partially shifted to the private sector as providers charge other patients more. In 2009, the amount of
Another reason for higher costs: aging baby boomers, who will increase the demand for services significantly.
Booming construction of health care facilities is another factor. Because capital costs tend to be financed over a number of years, the boom will affect costs in 2009 and beyond as hospitals try to pass along the expense of that construction to payers.
Most firms will not pass the hikes on to employees. Employers will rely more on prevention and disease management programs to temper cost rather than asking workers to pay more. There's a growing concern that cost shifting may have gone too far, causing employees to shun treatment or refuse insurance, ultimately increasing costs. Many employers are now focusing on what's called "value-based design," says Jim Winkler, a consultant with Hewitt Associates. "The idea is to design a plan to make sure, for example, that the diabetic gets regular foot and eye exams, so there are no complications later on."
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POSTED BY: Larry Cornett (November 16, 2008 01:55 AM)
Our company was able to save a good amount of health care costs by working with SurePayroll Insurance, which also handles our payroll services. Basically, the benefits specialists there suggested that to lower costs, we implement a wellness preventative program and to choose a plan structure that combines Health savings accounts (HSAs) and a high-deductible health insurance plans, you will potentially reduce your small business health insurance costs while giving your employees tax breaks. HSAs are tax-sheltered accounts that can be used toward paying medical expenses, including the insurance deductible. High-deductible health insurance plans have much lower premiums than managed care health plans. So these are some steps that corporations should look at for now. Hopefully, we can see some effective tax breaks coming out of the new administration that will offset some of the expense factors that are looming.
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