New Survey Predicts 10.6 percent Increase in Health Care Costs in 2009

A new healthcare survey points to another double digit increase in health care costs. A report by Aon Consulting shows insurers expect health care cost to increase an average of 10.6 percent in 2009.

The Chicago-based human resources consulting firm surveyed more than 70 leading health care insurers who represent more than 100 million insured individuals. The responses reflect the expected future increases to employer-provided health plans claims before any plan changes, based on the opinions of health plan actuaries.

Aon said the growth trend represents the lowest rate increase since it began doing the survey in 2001. But if past trends are any indication, more small firms will stop offering health care coverage and those employers who continue to sponsor health insurance coverage for their employees may shift a larger portion of the increase onto their employees through higher premiums, co-pays, and deductibles. The upshot will be more self-pay medical accounts and almost certainly, more medical bad debt.

According to the Kaiser Foundation, the number of businesses that offer health insurance has declined steadily since 2000. And those employers that do offer sponsored health care coverage now require their employees to contribute more to their premiums.

Kaiser’s Employer Health 2007 Benefits Summary of Findings, shows about 80 percent of workers with single coverage and 94 percent of workers with family coverage contributed to the total premium for their coverage. In 2007, the average annual worker contributed 16 percent towards the premiums of their employer-sponsored plan for single coverage. Employees enrolled in family plans contributed 27 percent towards employer-sponsored plans.

Meanwhile, Towers Perrin’s 2008 Health Care Cost survey predicted that Americans covered by employer health care plans will pay nearly 59 percent more towards their premium costs in 2008 than they did in 2003 (“Healthcare Premium Costs Jump 60% in Five Years: Report,” Jan. 10).

Linda Sherry, spokeswoman for health care advocacy agency Consumer Action, anticipates more consumers will postpone health care to avoid the added cost, particularly in these tough economic times marked by higher unemployment and energy costs. But that strategy could lead to more emergency care which costs more, she said.

“Where’ costs are certain to rise is emergency room visits,” Sherry said.

While Sherry said she believes much of the higher health care cost is driven by health care providers’ desire to give the best care, she said consumers, health care providers and insurers need to commit to making the system more efficient for everyone.

“Ultimately we have to get buy in of everyone,” she said.