Study Predicts Uptick in 2011 Health Care Costs for Employers, Workers
In 2011, U.S. employers will pay an estimated 8.8% more on average for their employees' health insurance costs, the largest increase in the past five years, according to a new study released on Monday by Hewitt Associates, the Los Angeles Times reports.
In addition, the study predicted that workers will pay 12% more for their share of those costs (Helfand, Los Angeles Times, 9/27).
For the study, Hewitt used U.S. census data and insurance cost and plan information for 350 large companies in its database. The companies employ about 14.4 million people and spent nearly $52 billion on health care in 2010 (Reuters, 9/27).
The study noted that:
- Larger U.S. companies will pay, on average, $9,821 in insurance coverage costs for each employee in 2011, compared with $4,083 in 2001;
- Workers will contribute $2,209 or 22.5% of that amount, a 12.4% increase to workers' share of the total premium from 2010 (Bunis, CQ HealthBeat, 9/27); and
- Workers' out-of-pocket expenses are expected to increase by 12.5%, to $181 month, including covering deductibles such as copayments and prescription costs (Japsen, Chicago Tribune, 9/26).
The study attributed the cost increases to an aging work force, larger medical claims and companies' responses to changes expected under the federal health reform law (Los Angeles Times, 9/27).
However, the health reform law is expected to have only a modest effect on the increases. The study said the provisions that took effect last week under the overhaul will add "approximately 1% to 2%" of the projected increase, The Hill's "Healthwatch" reports (Lillis, "Healthwatch," The Hill, 9/27).
Sacramento's High Costs
According to the survey, businesses in the Sacramento region had an average health care rate increase of 10.7% in 2010, one of the highest increases in the nation.
This year, the average cost of health benefits per employee in Sacramento is $9,910, compared with the national average cost of $9,028. The figures include employee contributions but not copays.
Experts say Sacramento's high rate hikes might stem from rising hospital and physician costs, as well as from the significant leveraging power of large health care systems such as Sutter Health and Catholic Healthcare West (Robertson, Sacramento Business Journal, 9/27).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.