Expect to Pay More for Your Health Care Coverage

NEW YORK (MainStreet) -- If “sticker shock” were a genuine medical malady, the U.S. Surgeon General’s Office might be issuing directives to Americans to stop opening their medical bills. Health care costs have exceeded $20,000, on average, for the first time ever, according to the 2012 Milliman Medical Index.

The exact cost, according to MMI, is $20,728, an uptick of $1,335 (6.9%) from 2011.

Most Americans don’t pay the entire cost. Of that $20,728, MMI says that the average total out-of-pocket cost is $3,470. Couple that with the average employer payroll deduction of $5,114, and that puts the total health care cost burden to the consumer at $8,584, according to MMI data.

The average annual rate of increase for health care was less than 7% from 2011 to 2012. The Washington, D.C.-based National Business Group on Health says the rate of health care expenses will once again rise to 7% in 2013, and large employers, who bear the brunt of that cost, have had enough.

A survey from the NBGH says that U.S. companies are drawing a line in the sand, and will be implementing a host of “cost-control measures” that will include asking employees to pay more for their health insurance and offer more “financial rewards” for staffers who engage in healthier lifestyles.
Employers told NBGH researchers that they are determined to keep their share of health care benefits below the 7% rate of cost growth in 2013. To get there, 60% of employers said they will hike the premium percentage paid by employers, although the rate hike should be below 5% of what employers are already paying. Employers also revealed these preferences in the survey:

  • 40% say they will raise in-network deductibles on employees.
  • 33% will boost out-of-network deductibles.
  • 32% will raise of out-of-pocket maximums.

The NBGH survey was conducted before the Supreme Court ruled the new health care legislation constitutional, but that ruling isn’t likely to lower health care costs, according to the survey.