Health Care Costs Predicted to do Little for Debt Relief
Consumers looking for debt relief may not find it with growing health care costs. According to consultants from PricewaterhouseCoopers.com, the cost of health insurance coverage is poised to increase 9 percent in 2010. Individuals may see an even greater jump in their premium costs. The rise in prices are partially attributed to current workers unsure of their jobs and using their health care more readily while it is still available. In addition, the rising unemployment rate is also contributing to the heightened medical costs.
Growing Health care costs
Although Congress is currently working to reform heath care as one of the Obama administration’s initiatives, any changes are predicting to have little effect on costs to individuals for health care next year. PWC Principal Michael Thompson stated that heath care reform will bring changes, but noted that “the intense focus on health care may [only] slow price increases down, but not stop them.”
The Pricewaterhouse.com data also shows that the cost increase of health care per person for benefit plans factors in price changes and utilization charges. A lot of businesses who have to manage the added cost will most likely pass the financial expense to their customers in the form of higher monthly premiums, deductibles and co-pays. Thompson confirmed that “If the underlying costs go up by 9 percent, employees’ costs actually go up by double digits… [this will have a] major, major impact when employers are also freezing or cutting pay.”
Consumers are fearful of unemployment
Almost half of the employers surveyed said that the increase in health insurance would be passed onto their employees. With everyone still trying to sort through the recession’s aftermath, this could be bad news for the average consumer. Experts remind consumers that the 9% estimated increase for 2010 is down from a formerly projected increase of 9.2%. Mainly the decrease can be attributed to people taking advice from experts and using generic substitutions when purchasing their medications. In an effort to find debt relief, many are asking their physicians to substitute for them.
A new Price Waterhouse survey showed that most consumers are fearful of unemployment. This makes them more prone to seek health care, now that they still have it, rather than put it off like they may have done in the past. The survey also cited that 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.”
Regardless of how it works out, consumers are going to have to be ready to sustain the added cost of health care. Already deductibles, co-pays, medications and out-of-pocket expenses are weighing heavily on consumer’s finances. Vivian Laiterman of Scottsdale, Arizona fell ill a year ago. Although her health care provider paid for her immediate care, there were many other costs. “I had a deductible of $1,500. Once that was reached my insurance took care of the bulk of my care, but not after-care. I had to pay for my weekly physical therapy bill and medications out of pocket.”
Health care in the future
Consumers seeking debt relief may be disappointed when health care costs continue to rise. Many will have to rebuild the cost of added health care into their budgets. No one knows how the new health care plan will play itself out in the economy, but people have to be prepared for an even tighter financial plan.