Employer Health Care Costs To Increase by an Estimated 12% Next Year, Survey Finds

Employers next year will pay an estimated 12% more for employee health care benefits, marking the fifth consecutive year of double-digit increases and a doubling of employer health care costs since 1999, according to a survey to be released today by Towers Perrin, the Wall Street Journal reports. The benefits consulting firm surveyed 200 employers with an average workforce of 7,200 employees. The survey finds that next year is projected to be the first in the last five years in which the rate of health cost increases is expected to slow; this year, health care costs rose at a rate of 16%, according to the survey. Jim Foreman, managing director for Towers Perrin's global health and welfare division, said that employers and employees alike are "paying much, much more" than they once did. To offset the rising costs, many employers are planning some combination of higher premiums, deductibles or copayments and changes in benefits, the Journal reports. According to a Kaiser Family Foundation study on 2003 health care costs that was released this month, employees this year are paying about 50% more in premiums than they did in 2000 (Fuhrmans, Wall Street Journal, 9/29).