Another health insurance rate hike expected by next year

Health Insurance NewsMercer has released the results of its annual survey which have indicated that there will be an increase of 5.4 percent to employee health care benefit costs in 2012.

Though the forecasted increase in health insurance rates will be the smallest one that has occurred in the last 15 years, it should still be noted that this increase is remarkably higher than salary growth and the inflation rate, the latter of which was at 3.9 percent.

The employers who participated in the Mercer survey stated that they have been attempting to keep health insurance costs as low as possible by increasing the deductibles, shifting employees to health plans that cost less, and boosting paycheck contributions.

According to Susan Connolly, a Boston office partner at Mercer, though the slower cost growth for 2012 is considered to be good news as increases go, “it’s still higher than the [consumer price index] — which means employers won’t be letting up their efforts to control costs anytime soon.”

Employers who made no move at all to reduce their benefit costs would face an increase of 7.1 percent. Though this would still be less than the annual increases of approximately 9 percent that have been seen over the past couple of years, the majority of employers still find that this is too high to be able to absorb the extra.

When all is said and done, all of these efforts to reduce cost are leaving the employees with higher out-of-pocket payments. According to Mercer, this trend is expected to continue as approximately one third of the participants in the survey said that they intend to raise co-payments or deductibles in 2012.

California Allstate agent, Loreen Worden, suggests supplemental health insurance like cancer insurance and accident plans. Many employers are putting these options in place in order to make up for the high out of pocket expenses. Worden states, “If your employer doesn’t have these options there are individuals and family plans available for consumers to purchase on their own.” She added, “that most of these plans, depending on the state and age, an average individual monthly premium for a 45 year old will run from $18 to $36.”

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