September 28, 2011

Health Insurance Costs UP 9+%

Many recent news articles are quoting this statistic with alarm.  No kidding!  Any way that one looks at the number or the graph, they see continuing decline of the health care value construct.
If you want to go beyond the news clips and get some of the background data, go to the source – this is from the survey by the Kaiser Family Foundation.
This survey also states that some of the cost is due to the addition of key factors in the Health Care Reform Act, one of which is the ability of a family to add dependent children up to the age of 26.  This added 2.3 million young people to the insurance rolls this past year.
Many other factors in the report bear repeating, including the obvious, workers are paying a higher portion of the cost and families are being hit harder by this inflationary trend in a weak environment than by many other household expense trends.  The CEO of the Foundation used this slide in a column to highlight the issues and stated, “In the short term, employers have few new tools to control premium increases.”  Dr. Altman goes on to point out that there are going to be more high deductible plans and more cost shifting.  Readers of this column already know all of this, but you can read his comments here.
Of course, this is news but the impression that employers have little option but to accept the increases is not totally representative of all employers.  Subscribers to this site are in a war with health care costs and looking hard at the “value proposition.”  The increase  in costs and fees is forcing everyone to look at the design of their plans and how on-site programming can help prevent continued cost increases.  In another reported segment, it was noted that the CMS related costs (MEDICARE and MEDICAID) rose significantly less (about half as much!).  This implies cost-shifting in the private insurance sector – exactly what on-site programs prevent.

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