Pace of Employer Health Care Cost Increases to Remain Steady in 2010
While the debate over health care reform rages on in Congress, U.S. employers can expect medical costs to grow by 9% in 2010, according to a new report from PricewaterhouseCoopers' Health Research Institute.
The 9% projected cost increase is a slightly slower rate of growth than in previous years. Medical costs grew by 9.2% in 2009 and by 9.9% in 2008. Despite the modest slowdown, medical cost increases continue to significantly outpace inflation and wage increases, according to the report.
Dr. Jack Rodgers, managing director in the health policy economics group of PricewaterhouseCoopers, says American workers are accelerating their use of health care in anticipation of losing their jobs and, potentially, their health insurance coverage. Other factors driving up medical costs in 2010 include the rise of unemployment, which is resulting in an increase in the uninsured and underinsured population, a drop in membership in commercial health plans, and a higher percentage of the population covered by Medicaid.
The report also found that 42% of employers surveyed said they would increase their employees' share of healthcare costs.
Certain trends are helping to deflate health spending, including an increase in the use of high deductible health plans and wellness and disease management programs, according to the report. More than two-thirds of employers said they offer wellness and disease management programs; however, few said the programs are effective at lowering costs. Participation among eligible employees remains low—around 40% for wellness programs and 15% for disease management programs.
