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Health Insurance Costs Rising Again in 2011
It's that time of year again, "open enrollment," and it's no surprise that health insurance costs for 2011 will be higher. How much?
According to global HR consultants Hewitt Associates, employers can expect U.S. health care cost increases to be at their highest levels in five years.
Hewitt recently announced that the expected 2011 cost per employee for large companies is $9,821. That’s an increase of $793 from the cost in 2010 and double what it was in 2001.
Employees can expect to pay 12.4 more in 2011 as their part of the premium. Out-of-pocket expenses, including copays, deductibles and coinsurance, are expected to increase as well, by 12.5 percent.
Many companies blame health care reform for the increase, and an uncertainty of what will happen as a result of the Affordable Care Act, also known as “ObamaCare”, no doubt drives up insurance costs.
While insurance industry experts say part of the 2011 increase is due to provisions of the Act that take effect next year, such as covering dependents to age 26 and the elimination of certain lifetime and annual limits, Hewitt estimates those immediate applications only contributed to the increase by about 1-2 percent.
According to Hewitt, recent higher medical claim costs, an aging population and changes brought about by health care reform are all to blame for the higher costs.
Although health care reform is not fully to blame for the increase, Hewitt health care practice leader Ken Sperling does say the "incremental expense of complying with the new law adds fuel to the fire, at least for the short term."
"Companies cannot afford to take a 'wait and see' approach to health care benefits. Now is the time for organizations to be bolder about the strategies, programs and tactics they're using to contain cost and motivate employees to engage in their own health," Sperling said.
Republican Congressman John Boehner, the next House Speaker, has pledged to repeal "ObamaCare" and replace it with "common sense reforms" that lower the cost of health insurance.
In a Nov 3rd speech President Obama said he is open to Republican input on the health care reform.
"If they want to suggest modifications that would deliver faster and more effective reform to a heath care system that has been wildly expensive for too many families and businesses, and certainly for our federal government, I'm happy to consider some of those ideas."
For now, we can expect health insurance costs to continue to climb as we wait to see what will happen with health care reform.