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Everyone Can Expect Higher Health Care Costs Next Year

Businesses and consumers can expect to see more increases in their health care costs in 2017. The hikes are expected to be about the same as 2016, and employees will continue to pick up a larger share of their individual medical expenses.
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Businesses and consumers can expect to see more increases in their health care costs in 2017.

The hikes are expected to be about the same as 2016, and employees will continue to pick up a larger share of their individual medical expenses.

People obtaining their coverage through exchanges set up under the Affordable Care Act (ACA) can also expect their insurance premiums to rise, perhaps slightly more than people who are covered by company health plans.

However, some experts say these increases should start to level off as telemedicine gains in popularity, and the industry cracks down on the skyrocketing costs of pharmaceutical drugs.

What businesses expect

The managers of some of the larger companies in the United States expect their health care costs to rise about 6 percent next year.

That data was gleaned from a survey released this month by the National Business Group of Health.

The nonprofit organization received responses from managers at 133 large U.S. corporations that offer coverage to more than 15 million people.

The association said the 6 percent hike is what these companies would have experienced the past two years if they hadn't made adjustments to their health plans.

"These cost increases, while stable, are both unsustainable and unacceptable," Brian Marcotte, the organization's chief executive officer, said in a news release.

Employers listed rapidly rising pharmaceutical drug prices as the chief reason for their increase in costs. In particular, they noted the skyrocketing cost of specialty drugs.

Company executives also said they will utilize telemedicine more. Nine out of 10 executives said they will make telehealth services available to employees in states where it is permitted. That's up from 70 percent in last year's survey.

What employees can expect

Employees can probably count on higher premiums as well as paying more out of pocket for health care expenses.

About 84 percent of the large corporations surveyed said they would offer employees high-deductible health plans next year. That's about the same as this year.

About 35 percent will offer the high-deductible plans as the only choice for their employees.
That's also about the same percentage as this year.

Kurt Mosley, vice president of strategic alliances for Merritt Hawkins health consultants, said he's "shocked" by the 35 percent high deductible-only percentage.

However, he said the shift makes sense as companies try to keep up with rising insurance premiums as well as pharmaceutical, mental health, and other medical expenses.

"They have to balance their losses," Mosley told Healthline. "Bringing more costs to the workers makes sense."

Mosley added the new people obtaining health insurance through the ACA exchanges also is having an effect.

Many of those people have pre-existing health issues and are expensive to cover. The insurance companies in the exchange, however, are not getting enough younger, healthier people to balance that out.

The increased costs tend to ripple through the entire industry.

"It's all one pool. I don't care what anybody says," commented Mosley.

What to expect with the exchanges

People who sign up for health plans under the ACA exchanges may see their insurance premiums rise more than those with employer-based coverage.

An analysis by the Kaiser Family Foundation predicts the cost for the exchanges' second lowest "silver plans" will increase by an average of about 9 percent.

The foundation notes the increases may vary widely from state to state. In some places, they could drop as much as 13 percent, while in others they could leap by as much as 25 percent.

The foundation's predictions are based on requests made by insurance companies to the states for insurance premium hikes for the upcoming ACA enrollment period.

The so-called window where people can sign up or change their plans runs from Nov. 1 to Jan. 31.
There has already been some shifting in these marketplaces this year.

Earlier this month, Aetna officials said they would offer individual plans in four states in 2017. Currently, it offers plans in 15 states.

Company executives said Aetna has lost $430 million on individual marketplace plans since 2014.
In April, UnitedHealthcare officials announced they plan to significantly reduce their participation in ACA marketplaces in 2017.

This summer, Blue Cross and Blue Shield of Minnesota announced they will stop selling individual market plans in that state. The firm said the change was made because it was projecting a three-year loss in the individual markets of more than $500 million.

Mosley said these defections will have a ripple effect across the country.

"There are such big players. It affects everybody," he said.

What to expect in the future

Experts say there may be some leveling off on health care costs in the near future.

Dr. Georges Benjamin, the executive director of the American Public Health Association, said health care costs have risen lately but not as much as they would have if the ACA had not been implemented.

He said the industry right now is caught in an "insurance cycle" as firms adjust to the new members joining.

"We shouldn't expect that trajectory to continue," Benjamin told Healthline.

He added that preventive medicine programs, including those pushed by companies, should help lower costs as consumers improve their health and stop making repeat visits to medical facilities.

"We'll stop paying twice for things that should have been fixed the first time," he said.

Mosley said higher costs are going to force people to become better informed when it comes to making health care choices.

"Employees will need to become smarter consumers," he said.

By David Mills

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