Looking at Health Costs for 2009

A recent study by Pricewaterhouse Coopers examines health cost trends into the near future. The study by Coopers' Health Research Institute predicts that although costs have been rising, the percentage of that rise has declined since 2003.

However, for 2008 and into 2009, costs are expected to increase every year into the foreseeable future. For 2008 and 2009 health costs are predicted to have increased nearly 10% per year. That increase is double the inflation rate. The study predicts that premium and costs can be expected to increase over the next ten years while real health costs decrease. Finally, in the absence of a policy solution for health costs, the increases in private payor premiums will continue.

The report shows that one factor leading to these increases is cost-shifting of the uninsured to the insured. The report states that one in every four dollars spent by private insurers is accounted for by cost shifting. Every time Medicare and Medicaid restrict or lower funding, the cost of that uninsured care is shifted to private payors. In effect, a perceived entitlement tax savings is really no savings at all and is passed on to private insurers. That cost is reflected in premium increases to businesses and individuals that purchase insurance. Good information in a concise format and the report is available at the Pricewaterhouse Coopers website.