Health Costs at Larger Companies in Bay Area Up 7.4%, Report Finds
Aon Hewitt said that the region has one of the highest inflation rates for such costs in the U.S., significantly higher than the national average of 4.9%.
For the report, Aon Hewitt examined cost and benefit data from 466 large U.S. employers with 14.9 million participating employees and dependents.
According to the report, the Bay Area is tied with San Antonio, Texas,Â for the highest rate of increase in health care costs at larger companies of any major metropolitan area. The rate for the two regions is slightly higher than the 7.2% rate for Los Angeles.
The report found that increases in health care costs at larger Bay Area companies next year likely will increase by 6.7%, compared to a national average of 6.3%.
According to the report, health care premiums and out-of-pocket costs for employees in the Bay Area are expected to increase from $4,373 in 2012 to $4,798 next year.
Reasons for Increasing Costs
Barbara Weaver Lloyd -- a senior vice president and local health and benefits practice leader in the region -- attributed the findings to the Bay Area's high cost of living and high provider costs. She added that the area also is dominated by an "unusually small number of groups of providers," such as Kaiser Permanente and Sutter Health.According to the Business Times, other factors contributing to the increase in health care costs at larger companies are the presence of large academic medical centers -- such as UC-San Francisco Medical Center and Stanford Hospital & Clinics -- and the preference of many area residents to use the high-end facilities (Rauber, San Francisco Business Times, 10/3). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.