Rising Health Insurance Costs A Problem For Individuals, Employers And Federal Government Alike

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Main Category: Health Insurance / Medical Insurance
Article Date: 27 Sep 2011 - 15:00 PDT

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Kaiser Family Foundation's annual study, published today (Tuesday 27th Sept) found insurance costs for the 150 Million Americans that have health coverage through their employers jumped by nearly 10% this year, presenting a quite a problem.

Kaiser and the Health Research & Educational Trust surveyed 2,088 randomly selected public and private employers large and small earlier this year.

"We're probably on a more modest side ... but even with a 5% increase in a premium (that our workers saw) this year, they didn't get a 5% raise,'' said Jeff Franck, a compensation and benefits manager at Altru Health System, which employs about 3,700 people in North Dakota and Minnesota, and which participated in the survey.

US health insurance is largely provided by employers, however numbers are falling with 2011 showing a drop of some 20 million from 2010 which came in at 170 Million people. The Kaiser Survey showed on average employees contribute around $4,100 or nearly 30% of their healthcare insurance costs, which is up 131% from a decade ago, with the overall premiums paid increasing 113% from 2001's numbers.

More people, especially those employed by smaller companies are electing to subscribe to plans with a larger deductible with nearly a third of all employees choosing to pay the first $1000 or more per year from their own pocket before their coverage kicks in.

One of the reasons cited for the increasing costs is a function of president Obama's new healthcare reforms that allows parents to add their children under the age of 26 to their employer provided healthcare plan. Whilst it's hard to argue that someone over the age of 21 is still a child, the reform aimed to resolve a growing problem of younger adults being without any coverage whatsoever. However, like so many government mandated ideas that sound good on paper, in practice, forcing the market place to take on unwieldy challenges simply results in higher prices for everyone.

There is hope yet though as Kaiser president and chief executive Drew Altman explains that this section of the healthcare reform was not meant to reduce costs, and other new measures have yet to kick in.

"There are a variety of factors that could have been responsible for (premium increases), but the major reason is not the healthcare reform,'' he said.

The survey's aim was not to look too far into reasons for the cost increases but Altman and other analysts suggest that insurance companies had planned for an economic rebound in 2011, with more people going to the doctor and this did not quite pan out.

The insurers have blamed the rising premiums on the rising costs of healthcare and expanded coverage. The problem however, is unlikely to go away and is far from a temporary glitch with Congressional Budget Office figures showing several decades in which rising healthcare costs have exceeded most other measures of economic output and growth, leaving the general public and their employers with an ever increasing healthcare tab as a percentage of total income.

A bipartisan congressional deficit reduction panel is scheduled to make recommendations 23rd November this year, suggesting ways in which the US can cut its deficit and with healthcare costs on a steady march higher, a part of their report is bound to focus on this and ignite heated debate.

Rupert Shepherd BSc. Reporting for Medical News Today.com


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