Report: Employer Health Costs Jump Nearly Nine Percent in 2014

Posted: May 16, 2014 11:30 AM

Healthcare premiums under Obamacare continue to climb, as healthcare "cost curves" maintain their upward trajectory -- both for the federal government and within the private market. The Los Angeles Times reports:

Employer healthcare costs are expected to rise nearly 9% in 2014, a slight improvement over recent years, according to a new survey. However, that modest decline doesn't offer much relief to companies and their employees, who are seeing health insurance costs take a bigger bite out of their paychecks. "Even though the decline is good news, most [health] plan sponsors still find 8% to 9% cost increases unsustainable," said Harvey Sobel, a principal at Buck Consultants, a benefits consulting firm that surveyed 126 insurers and health plan administrators nationwide...The report released Thursday found that costs for preferred-provider organization, or PPO, plans are expected to rise 8.7% this year. That's down from 9% last year...Some insurers surveyed cited patients' lower use of medical care as the primary reason for the decreases...Overall, U.S. healthcare spending has been growing at historically low levels from 2009 to 2012, federal data show. Many health economists and industry officials have attributed the slowdown primarily to lingering effects of the Great Recession, when millions of Americans cut back on medical care...Even with the slowdown, the rise in health premiums continues to outpace inflation and wage growth.

As we've addressed many times over, the administration's attempts to claim credit for the recent deceleration in health spending increases have been debunked by the government's own actuaries. As the piece above indicates, economists cite the economic downturn as the driving force behind that phenomenon -- which may now be coming to a close. Imagine how sharply spending would be rocketing up if we were in the midst of a robust economic recovery, in which case the combined effects of Obamacare's newly insured and economy-related usage increases would blast spending into the stratosphere. Indicators appear to suggest the US economy actually contracted in the first quarter of 2014. And again, this year's expected maintenance of last year's rate of cost increases is not the same thing as significant cost decreases, which is what we were promised. The arrow is still inexorably pointing in the same direction. NPR, which earlier this week put a cheerful spin on the trend of employers dumping and changing coverage plans due to Obamacare, follows up with a more straightforward report about the impact of the law on a company in Ohio:

AmeriMark, like most businesses, has been coping with rising health insurance premiums for years. This year, the company's initial estimate from a broker was a 30 percent increase in the price of premiums if they stayed with the same insurance provider. Lyons says they shopped around, chose a new company and changed some of the policy's benefits — such as increasing the deductibles and copays that employees pay as their contribution to their own health coverage. Such changes in plans have become increasingly common nationally in recent years as annual increases in health care premiums have become normal. For many medium-sized companies, like AmeriMark, the new costs of the Affordable Care Act are an added burden on top of the health insurance premiums that have been rising for years. The largest of the new Obamacare costs is the health insurance provider tax, or HIT. It's a tax that the federal government charges insurance companies, and the size of the fee depends on how many people the insurer is covering. Insurers then pass that cost on to employers. And employers, in turn, pass some or all of the cost on to their workers...Giesler says the company debated dropping health insurance for its employees — a step that, beginning in 2015, would result in an expensive penalty. In the end, the firm decided to keep providing insurance. But that decision may change in the future, he says, if costs continue to climb.

Let's count the broken promises in this excerpt alone: Facing a hefty double-digit premium increase (1) because of Obamacare's various mandates and taxes (2) AmeriMark was forced to drop its existing plan (3) in favor of a cheaper option that shifts more out-of-pocket costs onto workers (4). And if costs continue down the current path, the company is holding open the possibility of ceasing to offer health coverage altogether (5) -- which it has done since the 1960's. As overall spending lurches upward for the Uncle Sam, healthcare bills rise for companies, and rates plus other costs climb for individuals and families, you'll be pleased to know that the government continues to waste taxpayer money on Obamacare -- and not just through insanely wasteful broken website boondoggles. Watch this investigative report from a news station in Missouri, where employees at a company awarded a $1.2 billion federal Obamacare contract were paid, quite literally, to do nothing: