Employer Health Care Spending Could Increase By 12% Without Changes, Report Finds

November 21, 2006 – 9:36 pm | posted in Health Insurance

Without changes to their current employee health plans, companies in 2007 could face cost increases of between 10% and 12%, according to a PricewaterhouseCoopers report released this week, the San Diego Union-Tribune reports. According to the report, based on a survey of major health insurers, health costs in 2007 are expected to increase by 11.9% for PPOs, 11.8% for HMOs and 10.7% for high-deductible plans with health savings accounts. Increases in the usage of new tests and treatments, the amount of coverage sought by employees, and higher rates of obesity and inactivity all are contributing to rising costs, the Union-Tribune reports. According to the report, employers might impose higher out-of-pocket costs to counteract the projected increase and some employers are creating wellness programs to improve workers’ health and, thus, lower costs (Darce, San Diego Union-Tribune, 11/15). Michael Thompson, a principal at PWC, said, “What the insurers are projecting is double-digit increases if you don’t do anything,” adding, “Many employers, most employers, are doing something” (Simon, AP/Washington Post, 11/13).

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