Health costs surge despite weak inflation

Back to TopCommentsE-mailPrintBookmark and Share

Ben Bernanke may be worried about deflation in the economy, but there’s certainly no chance of it in health care and insurance. Employers’ health plan premiums surged another 8 percent this year, according to results from a massive survey by Indianapolis-based United Benefit Advisors.

In 2009, employers sustained a 7.3-percent increase in their health plan costs, according to UBA, which is a network of 145 benefits consultants nationwide. This year, the network surveyed more than 11,000 employer health plans around the country, making its annual study the largest of its kind.

“In spite of passage of health care reform legislation, health care costs will continue to increase,” Bill Stafford, vice president of UBA, said in a statement. “There has been little coming out of Washington to date that addresses the underlying health care issues that can help control costs.”

Between December 2007, when the recession began, and July 2010, consumer prices are up a total of just 2.9 percent, including the 2008 run-up in commodity prices. After consumer prices dipped slightly in June, some investors began to worry about a trend of falling prices or deflation.

Bernanke, the chairman of the U.S. Federal Reserve, has been fighting against economic stagnation and deflation for the past two years by keeping interest rates low and using federal dollars to buy Treasury and mortgage bonds.

Meanwhile, since the recession began, the cost of of health insurance taken together with medical care has risen 8.1 percent—nearly three times as fast as the rest of consumer prices, according to figures from the U.S. Bureau of Labor Statistics.

So what are employers doing to handle their rising costs?

According to UBA’s survey, they raised employee contributions in 2010 by 6 percent for family coverage and 8 percent for individual coverage. Employees now contribute, on average, $5,300 a year for family coverage and $1,350 for individual coverage.

Also, employers continue to move employees into consumer-directed health plans, such as health savings accounts and health reimbursement accounts.

The number of such plans being offered grew by another 18 percent, although that was nearly half the growth pace recorded last year.

Consumer-directed health plans saved employers a small amount of money this year. Premiums on the plans rose only 7.3 percent this year, slightly less than the 8-percent average.

But for the first time, the number of employees enrolled in such plans declined—a sign of joblessness across America.

“The trend toward employee empowerment and participation continues in 2010 when it comes to health care,” Stafford said.


  • Supply and Demand
    As long as the demand for healthcare grows the cost will continue to grow at an exponential rate. All contributing members of society will endure the heavy burden of a sick country that is addicted to unhealthy food. As Americans become more and more dependent on the ability of doctors to help them cope with diseases that have resulted from their addiction to food, the cost to the rest of us will skyrocket. Diabetes, heart disease and cancers will continue to rise in numbers and the cost to the taxpayer and all those that get sick once a year will have to pay a lot more for that visit. Iâ??m not sure why more Americans arenâ??t enraged by this, because our country will go broke from the poor food choices made by millions on an all to frequent basis. Take your health into your own hands, make wise food choices!
  • Thanks Barry O
    Hope and Change we can count on. So let me get this straight. Barry waltzes into office as the best thing since, I don't know, the messiah and sure enough keeps his word. His hopes are realized in screwing us and change, how about passing a healthcare pkg that cripples us and now after the first of the year taking away the tax cuts. Yep, that Barry guy, he's someone we can count on. Everyone of us sorry individuals that voted for him and believed him are getting EXACTLY what we deserve.
    Not sure where you got those figures. Anthem has increased group costs as much as 28%!!! in Columbus on top of 20%+ last year. I hate Anthem as no one else does and I'm moving my coverage as well as many people that I know. I am not willing to fund obscene perks for the executives.

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. Of what value is selling alcoholic beverages to State Fair patrons when there are many families with children attending. Is this the message we want to give children attending and participating in the Fair, another venue with alooholic consumption onsite. Is this to promote beer and wine production in the state which are great for the breweries and wineries, but where does this end up 10-15 years from now, lots more drinkers for the alcoholic contents. If these drinks are so important, why not remove the alcohol content and the flavor and drink itself similar to soft drinks would be the novelty, not the alcoholic content and its affects on the drinker. There is no social or material benefit from drinking alcoholic beverages, mostly people want to get slightly or highly drunk.

  2. I did;nt know anyone in Indiana could count- WHY did they NOT SAY just HOW this would be enforced? Because it WON;T! NOW- with that said- BIG BROTHER is ALIVE in this Article-why take any comment if it won't appease YOU PEOPLE- that's NOT American- with EVERYTHING you indicated is NOT said-I can see WHY it say's o Comments- YOU are COMMIES- BIG BROTHER and most likely- voted for Obama!

  3. In Europe there are schools for hairdressing but you don't get a license afterwards but you are required to assist in turkey and Italy its 7 years in japan it's 10 years England 2 so these people who assist know how to do hair their not just anybody and if your an owner and you hire someone with no experience then ur an idiot I've known stylist from different countries with no license but they are professional clean and safe they have no license but they have experience a license doesn't mean anything look at all the bad hairdressers in the world that have fried peoples hair okay but they have a license doesn't make them a professional at their job I think they should get rid of it because stateboard robs stylist and owners and they fine you for the dumbest f***ing things oh ur license isn't displayed 100$ oh ur wearing open toe shoes fine, oh there's ONE HAIR IN UR BRUSH that's a fine it's like really? So I think they need to go or ease up on their regulations because their too strict

  4. Exciting times in Carmel.

  5. Twenty years ago when we moved to Indy I was a stay at home mom and knew not very many people.WIBC was my family and friends for the most part. It was informative, civil, and humerous with Dave the KING. Terri, Jeff, Stever, Big Joe, Matt, Pat and Crumie. I loved them all, and they seemed to love each other. I didn't mind Greg Garrison, but I was not a Rush fan. NOW I can't stand Chicks and all their giggly opinions. Tony Katz is to abrasive that early in the morning(or really any time). I will tune in on Saturday morning for the usual fun and priceless information from Pat and Crumie, mornings it will be 90.1