Health Insurance Articles
Why Health Insurance Costs Might Rise In The Next Year
2011-03-31
Health insurance costs might rise in the next year for the same reasons they've been rising for years, according to analysts, including higher hospital and doctor expenses. Companies found medical costs should rise 9.5 percent in 2011. Health insurance costs might rise in the next year, actually, at a slightly lower rate than in 2009 and 2010 when health care costs rose 10 to 11 percent. The consulting firm Aon said new health care reform laws coupled with higher prescription drug prices accounted for those increases.
Prescription drugs were expected to rise 8.4 percent, specialty pharmacy products by 14 percent with health care reform adding 2 to 5 percent. According to Aon, analysts found health plan costs rose around 10.6 percent in 2010, up slightly over 2009 and should continue to grow at around that rate. These increases actually were lower than 13 to 16 percent annual increases in the mid-2000s.
The biggest inflators of costs today are provider costs, according to some companies. These include hospital Medicare rate cuts, provider consolidation which increases their bargaining power, increased investments in certified electronic health record systems to avoid Medicare penalties that begin in 2015. Medicare is the single largest payer for hospitals.
Heath might rise in the next year due to factors including obesity and aging, expensive medical treatment, rising costs associated with providing insurance, and the new health care law, according to an industry survey of 60 health organizations from across the nation. Employer-provided health care plans will rise from 9 to 10 percent to align with costs, according to analysts. Those costs will be passed on to workers in most cases, researchers found in a study by Kaiser Family Foundation and the Health Research and Educational Trust.
With employees paying more in employer-based plans, the rising health care costs will be more directly felt in consumer budgets, according to analysts. Employers were projected to pay more than $10,000 for each employee's health care and expected to increase employee out-of-pocket expenses by 12 percent to cover increased health care costs in 2011.
Additionally, factors unknown today may drive up health care costs in 2011. Unemployment numbers were a factor. Federal subsidies for COBRA payments for laid-off workers also improved enrollment, but ended. With continuing uncertainty in the economy, costs will continue to rise at least through 2014 when new health care laws will be in place. However, rates won't rise as high as they may after 2014, some analysts said. It is important know why health insurance costs might rise in the next year so that you can be prepared in your personal affairs.
