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AP: Health Care Costs Up (Actually Lower)

From the relentless propagandists at the Associated Press:

Report: Health care costs to rise 9 pct in 2010

By Tom Murphy, AP Business Writer – Thu Jun 18

INDIANAPOLIS – Employers who offer health insurance coverage could see a 9 percent cost increase next year, and their workers may face an even bigger hit, according to a report from consulting firm PricewaterhouseCoopers.

Costs will rise in part because workers worried about losing their jobs are using their health care more while they still have it, the firm said in the report released to The Associated Press. The report also said rising unemployment is driving up medical costs.

Health care reform legislation currently being hashed out in Congress likely will have little impact on next year’s costs, said PWC principal Michael Thompson. But he noted that the intense focus on health care may slow price increases.

"Nobody wants to be front page news when all the lights are shining on your industry," he said.

The report projects the expected cost increase per person for employee benefits plans, and it factors in things such as price increases, as well as utilization changes.

Businesses confronted with increases will likely pass some of the burden to employees via higher premiums, deductibles or copays, Thompson said.

"If the underlying costs go up by 9 percent, employees’ costs actually go up by double digits," he said, noting that will have a "major, major impact" when many employers also are freezing or cutting pay.

A total of 42 percent of employers surveyed said they would increase employees’ share of costs.

The 9 percent increase predicted for 2010, however, represents a slight decrease from the 9.2 percent PWC projected for this year, and 9.9 percent predicted for 2008. A growing use of generic drugs has helped tame spending, according to the most recent survey.

Actual cost increases for this year and last were not available.

PWC surveyed more than 500 employers and health insurers. One of the factors it found that may increase medical costs next year is the lingering threat of unemployment. Workers worried about losing their health coverage along with their jobs tend to seek medical care they might otherwise put off.

PWC also said health care providers tend to shift costs to private insurance plans to make up for the revenue drop they see from a rise in the uninsured population or from an increase in the percentage of people covered by Medicaid, the state-federal insurance program for the poor.

Georgetown University health economist Jean Mitchell said she sees one main reason behind any health care cost increase: overutilization. Mitchell, who was not involved with the survey, said health care costs have been rising faster than inflation because the payment system rewards care providers for doing more.

"Until we fix that, we’re never going to be able to rein in health care costs," she said.

Notice how far down into the article you have to read before you get to this nugget:

The 9 percent increase predicted for 2010, however, represents a slight decrease from the 9.2 percent PWC projected for this year, and 9.9 percent predicted for 2008.

But the AP has to keep the fear whipped up.

This article was posted by Steve on Thursday, June 18th, 2009. Comments are currently closed.

2 Responses to “AP: Health Care Costs Up (Actually Lower)”

  1. proreason says:

    What a bunch of garbage.

    If you decide to go to the ballpark 10 times this year instead of 5 times, your ballpark costs will increase, won’t they?

    The price of a ticket may be the same as last year, but you spend more. Since it’s your decision to spend more money, you would be disingenuous to say that ballpark costs doubled. Or rather, STUPID, not disingeuous.

    Average medical costs increased from May 2008 to May 2009 by 3.2%. Here’s the government data:

    http://www.bls.gov/cpi/cpid0905.pdf

    But showing that data wouldn’t forward the Universal Health Scare agenda, would it?

  2. MinnesotaRush says:

    Isn’t it amazing how they can claim this:

    “Report: Health care costs to rise 9 pct in 2010” when later they admit this:

    “Actual cost increases for this year and last were not available.”

    In other words, “Boy oh boy .. we gotta great handle on what’s gonna happen; but .. we ain’t got a clue what DID happen!” Whatha!?!?!?

    And how foolish is this:

    “Costs will rise in part because workers worried about losing their jobs are using their health care more while they still have it, the firm said in the report released to The Associated Press.”

    I can hear the watercooler chatter now .. “Yeah, Bob .. I’m going in for that appendectomy next week.” “Gee .. I didn’t know you weren’t feeling well.” “Oh .. I’m feeling fine; but I might get laid off so I’m gonna get ‘er done now.” .. or Betty tellin us she’s going in for hip replacement on Tuesday .. “You know those hips don’t last forever and I might not have healthcare when I need them replaced!”

    Mr Murphy, AP Business Writer .. you’re an idiot. A useful one possibly; but still an idiot.


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