Tuesday, August 25, 2009

Private insurance care costs

Story on projected increase in health care expenditures of private health insurers of about 10% this year over last. Note the discussion of the idea that some employers will eat some of these costs and not pass them on via increased premiums since many workers got little/no salary increase this year, while others will move to further limit wage growth due to these costs and/or alter insurance options toward more high deductible options that make employees more responsible for more of their initial care. They note rising demand at least partly linked the aging of the workforce that is still employed. As the workforce ages due to the fact that the baby boomers had fewer kids than their parents, this will be an upward pressure on spending. Note that moving toward higher deductible options is a way to reduce the subsidy of healthy, younger workers of older, sicker workers because the employer can provide the same premium amount on behalf of each employee, but the younger workers are (probabilistically) less likely to use care.

1 comment:

  1. nice post - any thoughts on McKinsey study on how private insurance system impacts income ineqeuality/ http://www.mckinsey.com/mgi/publications/income_disparity/