US Health Care Costs Rose Sharply in 2011

Posted September 27th, 2011 at 3:45 pm (UTC-5)
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A new study shows the cost of U.S. health care rose dramatically in 2011, a factor that increases pressure on the shaky economy and a faltering job market.

The Kaiser Family Foundation study found that annual health care premiums for insurance provided by employers were up 9 percent compared with 2010. In contrast, workers’ income rose by only 2 percent over the same period, while inflation rose about 3 percent.

The head of the foundation, Drew Altman, says insurers may be raising prices in anticipation of added costs, as U.S. health care reform legislation goes into effect.

Kaiser notes that costs to insurers already are rising because of a provision in the health care reform law that went into effect right away. That provision allows parents to keep their adult children on their own insurance plans up to age 26, because that age group is historically more likely than any other to go without health insurance.

The rise in costs affects both employees and employers, as both sides contribute to the average $15,000 that family health coverage cost this year.

On average, the family paid about $4,000 of the cost, while the employer paid $11,000.

Rising health care costs in a weak economy can make companies reluctant to hire new workers or give wage increases. Consumers also may cut back on the amount of health care they seek, to keep costs down.