Projected and Rising Health Insurance costs Author:    Posted under: Health InsuranceHealth Insurance questions answeredHealth Insurance Rates


According to the U.S. Census Bureau, employers offering health care coverage to its workers have dropped from 59 percent in 2001 to approximately 55 percent in the latest data. Employers most often cite the escalating premiums as why they drop coverage or do not offer health insurance coverage at all.

Every year we are faced with more and more challenges as a workforce and some of them in their highest degree each year. The rising costs of health care are one of the major struggles we are facing. This is particularly true today, as slower levels of hiring have left employers with slightly older workforces who are more prone to costly medical conditions. According to Hewitt Associates, they have estimated that the most immediate applications of health care reform—including covering dependents to age 26 and the elimination of certain lifetime and annual limits—contributed approximately 1 percent to 2 percent of the 8.8 percent projected increase for 2011.

According to sources, one of the primary reasons why health care costs are towering is that most of the time when we enter the medical marketplace as patients, we are spending someone else’s money. Economic studies confirm that we are less likely to be practical, careful shoppers if someone else is paying the bill. But when we are paying our own medical bills, we are more conservative consumers. The amplification in spending has occurred because most likely we are not the ones paying the bill.

Reports have said that by 2019, nearly 93 percent of the population is projected to have medical coverage, compared with about 84 percent now. Without the new health care law, the percentage of people with coverage was expected to dip to 83 percent during the next decade.

Now more and more of both employees and employers are feeling the effects of the rising health care insurance costs. As rates continue to rise –doubling over the last few years – more and more small time businesses are having to cut back to paying only half of healthcare costs and requiring workers to handle the rest.

It would not come as a surprise if more and more of these smaller businesses would only be able to afford shouldering even less of the 50% in the next few years. “There’s very little you can do — either scale it back or stop offering it. –there’s just no money for health benefits.”

Although many employers who offer workers health insurance coverage view it as a vital benefit to attract and retain the best employees, — without significant reforms to address the soaring costs, the employer-based health care coverage system will continue to shrivel.

Sources:
http://www.ncpa.org/pub/ba437
http://edlabor.house.gov/newsroom/2009/03/rising-health-care-costs-threa.shtml
http://articles.latimes.com/2010/feb/15/business/la-fi-lazarus15-2010feb15

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