Health Care Costs Increase 10.6% For U.S. Workers
American workers have seen an average increase of 10.6% over the past year in the amount they spend on health care services, according to health care consulting firm Milliman and their fifth annual Milliman Medical Index (MMI), CNN Money reports. The $650 increase includes $500 for employee contributions to their company’s health plan and $150 for employee out-of-pocket expenses.
It was the third straight year of double-digit percentage increases in employees’ share of health care costs, according to the MMI. According to the Census Bureau, 177 million American, more than half the population, are covered by employer-provided health insurance.
Employers’ subsidies on their workers’ coverage increased about $500, or 5.4%, over the past year, the report said. The rise in employees’ costs exceeded employer costs by 30%. “In the history of the MMI, the increase in employee costs has never exceeded the increase in employer costs by more than 10%,” the report said.
Total 2009 medical costs for a typical American family of four, including both employer and employee costs, increased 7.4% in the past year to $16,771. In terms of the actual health care cost components, physicians made up the biggest chunk, at 34% of total medical costs, according to the report. But the rate of increase in physician costs actually declined to 6% from 6.2% in 2008.
“Employers are struggling in this economic downturn,” said Ron Cornwell, principal and consulting actuary with Milliman. “They are trying to manage their [business] expenses. Previously employers were picking up their portion of [health care] cost increases. Now they are implementing further increases in employees’ out-of-pocket deductions and copayments.”
The fastest growing component of health costs in the report is hospital outpatient care, up 10.2%. Hospital outpatient care makes up 17% of total health care costs. Pharmacy costs rose 7.9%, as consumers fill more prescriptions, even though many of them are the cheaper generics.