Rising Self Employed Health Care Costs
Jul 6th, 2011
The medical and insurance costs trend was expected to go up at least 8.5% in 2012. According to a PWC study, the increase can be attributed to these 3 accelerators: Provider consolidation continues, Cost-shifting from Medicare and Medicaid increases and Post-recession stress builds up on workforce. Medical cost trend is the projected movement of medical and insurance cost. The study shows that the biggest percentage of medical spending goes to physician care services which is 33%; 31% of the costs go to inpatient hospital care; 17% goes to outpatient care and 15% is spent on prescription drugs.
Provider consolidation. Doctors and hospitals are encouraged by the health care reform to consolidate. But this can drive up costs because hospital-based physician services are a lot more expensive than going to their office for check-ups. Fewer health care providers could also mean that they could demand higher reimbursement rates from insurers and insurers in turn will ask for higher premiums.
Post-recession stress. Recession is also seen to cause stress to employees prompting them to seek medical care. More use of medical care means increased costs.
Medical cost trend is the projected movement of medical and insurance cost. The study shows that the biggest percentage of medical spending goes to physician care services which is 33%; 31% of the costs go to inpatient hospital care; 17% goes to outpatient care and 15% is spent on prescription drugs.
What does this mean to small business owners? The employers can expect the increase in self employed health care to be just around the 8.5% projection. But they should be prepared for more employees needing more medical attention.
The health care reform is putting a lot of worry on small business owners. They worry that it will not only threaten their finances but may add to more administrative work as well. But the changes are inevitable and time is ticking fast. Some business owners have decided to embrace the changes and just think of ways to balance the demands of the self employed health care reform. Some are evaluating their medical care benefits; some are thinking about opting for high deductible health insurance plans; some are thinking of ways to boost their wellness programs.
Business owners in the state of New York should acquaint themselves with the New York health insurance exchange that is being set up for implementation by 2014. But as of now it is still in the process of development and provisions may not be available yet. Just stay tuned for updates.
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