Medical Costs And Medical Insurance Costs To Go Up in 2011
Posted on Sat, Jun 19, 2010
As expected, medical costs are expected to go up by 9% in 2011. According to PricewaterhouseCoopers LLP, this percentage is .5% less than the 2010 rate of growth.
The report by PricewaterhouseCoopers LLP also stated that 41% of businesses intend to raise cost sharing, which may mean increases in employee's co pays or deductibles. This would make most of the employees in America have a medical insurance deductible higher than $400. Employers are hoping that if their employees have to spend more out of their own pockets, then this will diminish the over usage of services and prescription medications.
About 700 companies from 30 different industries were surveyed for this report, as well as medical plan actuaries and other owners or executives whose companies offer medical insurance for 47 million American employees and their dependents.
According to the report, just 26% of businesses intend to raise prescription cost-sharing in 2011. Medical insurers are reaping the benefits from more people that are using generic prescriptions. In 2011, brand name prescriptions are going to go off patent, which represents about $26 billion in sales annually. In addition, 1/3 of companies with 5,000 employees or more contribute towards their before 65 retiree medical coverage. This is less than in 2009, where you had 47% contribute towards before 65 retiree medical coverage. Just 22% of companies that have more than 5,000 workers contribute towards after 65 retiree medical coverage, which is less than in 2009 when it was 37% of companies that contributed to after 65 retiree medical coverage.