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.

"Rising health care costs continue to plague employers at an alarming rate," offers Helen Darling, president and CEO of the NBGH. "Although cost increases have stabilized somewhat, they are still on a higher base from last year and are simply not sustainable, especially when our nation's economy and workers' wages are virtually flat and everybody is struggling."

The NBGH survey notes that employers are ramping up wellness efforts, a path, they believe, that will lead to lower health care costs included in the corporate bottom line.
Consequently, self-directed health plan are coming to a cubicle near you, the study says. Forty-three percent of large employers say some form of consumer-directed health plan is the “most effective” health care control option available to companies. Wellness programs are the second choice for limiting costs, at 19%, according to the survey.
Expect more companies to reward employees who, among other achievements, quit smoking and reduce their cholesterol levels, the group reports. Financial incentives for meeting such goals will rise from $250 (in median incentive average) to $375 in 2013, according to the report.

Employees would do well to take note, and make their own plans to curb their share of the health care expense pie.

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