Health Care Costs Continue to Rise

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Admit it – you saw it coming.

With all the drama over health care reform, and how it was supposed to make care more affordable, it may not surprise many to learn Americans are now finding the opposite to be true: health care is more expensive than ever, and prices are rising fast. A new study says that not only are health care costs on the upswing, but potentially one million Americans are seeing reduced coverage benefits as well.

The Kaiser Family Foundation has been chewing on the health reform story like a junkyard dog on a bone. The foundation’s 2010 Employer health Benefits Survey paints a grim portrait of the health care landscape. Kaiser estimates that American workers have seen health care costs rise by 14% already in 2010 – an increase of $482 from 2009. All told, American workers are paying $4,000 this year toward their own health care costs.

Kaiser notes a unique dichotomy: family premiums have only risen 3% for the year, even as employees pay significantly more for employer-sponsored coverage. (The study does point out that employers have not hiked their contributions for family health care coverage – thus forcing their workers to carry more of the burden).

In addition, roughly one in four workers with health insurance now face annual deductibles of $1,000 or more. That percentage doubles for workers employed by small businesses.

The trend of rising out of pocket expenses for employees isn’t anything new, although it has certainly accelerated in 2010. Kaiser reports that since 2005, worker contributions to health care plans rose by 47%, outpacing increases in overall health insurance premiums (up 27%), average wages (up 18%) and inflation (up 12%).

Overall, it looks like that in this post health reform era, employers are laying the groundwork to reduce their health care costs, and right now that means workers picking up the slack. "With the economy struggling, businesses have been shifting more of the costs of health insurance to workers through premiums, deductibles and other cost-sharing," Kaiser President and CEO Drew Altman, Ph.D., said in a statement. "This may be helping to stem the rapid rise in premiums that we saw in the early 2000s, but it also means employer coverage is less comprehensive.  From a consumer perspective, the cost of health insurance just keeps going up faster than wages."

You can’t blame rising costs strictly on health care reform though (most of the key provisions don’t even kick in until 2014 anyway): Kaiser points out that 30% of U.S. employers slashed their health care benefits because of the lousy economy, which surely preceded the health care reform’s passage through Congress.

But with companies like McDonald’s (Stock Quote: MCD) and 3M (Stock Quote: MMM) already announcing plans to reduce their health care benefits due to provisions of the health care reform act, expect many more companies to follow.

For the beleaguered American worker, it looks like health insurance rates will go nowhere but up in the near future.

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