A new study by PricewaterhouseCoopers reports that more than 40% of the 700 companies surveyed intend to increase employee contributions for health-insurance coverage, while an equivalent number plan to increase medical cost-sharing, including higher deductibles and co-payments, at the point of care. Meanwhile, the ranks of those offering health benefits for retirees are shrinking, with a 40% drop among those subsidizing coverage after age 65.
Alix Stuart of CFO.com explains that the main driver of increased costs next year is declining Medicare reimbursements from the government to hospitals, the result of estimated over reimbursements in previous years. Reimbursements are predicted to drop by a total of 0.35% next year for this reason and because of a mandate in the Patient Protection and Affordable Care Act to undershoot the inflation rate rather than keep pace with it. This will cause hospitals to seek funds from privately funded patients, including those on employer-sponsored insurance plans.
The recent health-care reform will not have immediate effects on current costs, but will most likely have some effects starting in 2014. Some current trends causing the increase in costs can be attributed to the consolidation of practices by physicians and hospitals. Overall, average per-patient medical costs are projected to rise 9.5% in 2010 and 9% in 2011, according to separate research from PwC’s Health Research Institute. PwC also expects hospitals’ investment in digitizing medical records to peak in 2011, again adding to short-term costs but likely reducing long-term ones.
This will cause patients to have to pay higher deductibles at their companies. Although there is a general trend of increase costs, some aspects are predicted to lower. Some $26 billion worth of prescription drugs, including Lipitor, are going off-patent and will be available in cheaper, generic forms in 2011. The number of people extending coverage through COBRA is also likely to come down in 2011 as fewer layoffs occur, reducing company health-care costs by about half a percentage point on average.
With hospital costs becoming more transparent, customers will have a clear picture of the costs they expect to incur, for both insured and non-insured clients. Brittany Durdin of PriceDoc also explains how the higher costs of health-care can affect employers and their employees. If you are underinsured or uninsured, visit PriceDoc.com to price shop for any medical procedure you may need or desire, and to find quality, affordable doctors near you.
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