In a recent article by Lisa Gillespie in Employers Benefit News it was noted that health care costs were projected to increase less than 10% for the first time in the last 10 years! Costs for all types of medical plans on average are expected to increase only 9.9% for 2012!
One of the trends that I am seeing that lends to the article’s premise is the market is trading down in coverage. Insurance carriers are offering less rich benefit plans and more catastrophic plans to match the needs of individuals and group. Since most business groups and individuals have not seen their income increase to match the rate of health care costs they are more often than not struggling to keep coverage for their employees and for themselves as individuals. This has led to larger deductibles, larger copay and greater coinsurance requirements. We are seeing more restrictions on prescriptions namely forcing the use of generics instead of name brands and limits on visits to doctor’s offices. Ultimately, everyone who purchases health insurance either individually or through an employer bears the additional costs and that is not reflected in the lower increase in health care costs specified by the industry. So, are health care costs really slowing or is the consumer bearing a larger portion of the costs not reflected in the study?