» Report claims health reform will ‘moderate’ costs

Report claims health reform will ‘moderate’ costs

December 14, 2011 by Jim Giuliano
Posted in: Human Resources, Special Report

A seven-year study of healthcare expenses shows where costs have been headed and claims to show what effect the Affordable Care Act will have on costs.

The study by the Commonwealth Fund – “State Trends in Premiums and Deductibles, 2003-2010: the Need for Action to Address Rising Costs” – found that during the ’03-’10 time period:

  • The average premium cost for family coverage increased 50%
  • The employee’s average annual share of premium costs increased 63%, and
  • On average, single-person deductibles for private-employer health plans increased by 98%.

Note that the data are for years prior to enactment of the Affordable Care Act. The reason Commonwealth did the study was to show cost trends without reform measures. Commonwealth further projected that the average annual premium for family coverage would continue to rise 72% by the year 2020, to nearly $24,000.

The report asserts that the new healthcare law contains “several … provisions that could help moderate premium growth, make premiums more affordable, and provide improved financial protection for insured individuals and families who have benefit gaps, high deductibles, or limits on covered medical care expenses.”

Among those provisions are mandates that health plan

  • in the large-group markets spend at least 85% of their premiums on medical care or services, and
  • in the small-group and individual markets spend at least 80% of their premiums on medical care or services, or offer rebates to their enrollees.

These requirements, the report says, are intended to force insurers to reduce their administrative costs. In addition, the law mandates that insurers justify any “unreasonable” insurance premium increases.

The report includes a state-by-state analysis of healthcare cost trends.

To find out more about the Commonwealth Fund, go here.



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  • Pipster

    Obamacare will reduce innovations which in turn would reduce costs. Review by government panels did not work in Britain or Russia, they won’t work here either to produce better care for less money. The only way to make anything cost less is to allow competition for consumer dollars which Obamacare definitely does NOT do. The more government tries to micromanage any segment of the economy or society, the worse that segment performs. The average person will be paying a lot more for less health care when the insurance exchanges are up and running-read the actual wording of the law and you will be horrified.


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