Health care costs rising, the holiday is over.

There is no doubt Obamacare is having an impact. While HHS spends a great deal of effort promoting all the added benefits for individuals, costs and hence premiums are quietly starting a new upward spiral.

There is no way to mandate new benefits, expand coverage and eliminate underwriting rules without adding to costs and hence premiums (and for many workers payroll deductions). Many retirees who were fortunate to have employer coverage will see an impact on their benefits in 2013 as well. Obamacare changed the tax status of the retiree prescription drug subsidy forcing some employers to drop coverage and others to place retirees into a self-funded Part D program which subjects retirees to all government rules including the income adjusted premium for Part D. Allowing children to be covered to age 26 under virtually any circumstance even if they have other employer coverage as an employee (come 2014) adds to employer group costs as well.

Employers cannot and will not simply absorb these additional costs on top of health care inflation. In addition to lowering their premium subsidies thereby increasing workers payroll deductions, health plans will be redesigned to be more catastrophic in nature, things like high deductible health plans. Co-pays will increase and networks will become more restrictive.

For every action there will be a reaction. While HHS promotes the benefits for this group or that group, all workers will eventually share the burden of additional costs.

This is from Kaiser Health News

Over the next three to five years, companies expect to subsidize employee-only coverage at 75 percent and dependent coverage at 69 percent, according to Aon Hewitt’s 2012 employer health care survey.

In 2013, 38 percent of employers said they plan to significantly reduce their subsidization of coverage for dependents and spouses, and 29 percent planned to discourage spouses with coverage available elsewhere from signing on with the employee’s plan through surcharges and other means, Towers Watson found.

And read this from CBS news, health care costs are expected to rise 8% in 2013. If that happens premiums in 2014 will rise even more.

2 comments

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s