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More cost-sharing coming as health care costs rise

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in Leaders & Managers,Management Training

Even after the U.S. economy recorded its worst contraction in a quarter-century, health care costs for the nation’s employers are expected to grow by another 9% next year, according to a new study by 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 9.9% in 2008. Despite the modest slowdown, medical cost increases continue to significantly outpace inflation and wage increases.

Among the main factors influencing medical cost trends: U.S. workers are accelerating their use of health care in anticipation of losing their jobs and, potentially, their health insurance coverage.

In the past five years, health insurance premiums have increased four times faster than wages, a trend that is expected to continue in 2010.

With their corporate profits pounded in 2009, employers told researchers they plan to push more of the costs of health insurance to their workers in 2010, while expecting greater responsibility from workers for managing their personal health.

The key statistics:

  • 42% of employers said they would increase employees’ share of health care costs. Those increases could squeeze workers, many of whom have taken pay cuts because of the recession.
  • 41% said they expect to increase medical cost-sharing through plan-design changes.
  • More than two-thirds of employers are offering wellness and disease management programs; however, few said they are very effective at lowering costs.

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