If you’re lucky enough to have healthcare options available through your employer, then you know how expensive medical insurance can be. When renewal time rolls around every year, you probably receive a notification that healthcare premiums have increased and that you’ll be paying more next year. Unfortunately healthcare costs are about to reach a new milestone in 2012, when the average annual cost is expected to top $10,000 per employee for the first time.

 

Human resource consulting and outsourcing firm Aon Hewitt released an analysis of healthcare costs for the coming year, and although the annual increase is only expected to be 7.0 percent, down from 7.5 percent last year, the national average will be close to $10,500 per employee.

 

The predicted annual cost per employee enrolled in an HMO plan is $11,151. This figure drops slightly for those who choose the POS option ($11,059) and the lowest cost option is the PPO plan at $10,038 annually. All of this adds up to a national average healthcare cost per employee of $10,475. In 2011, the figure was $9,792; back in 2005, the average annual cost was only $6,677.

 

So what is causing the steady increase in healthcare costs? Aon Hewitt reports that there are multiple reasons for rising premiums, including an increase in the number of catastrophic claims. This is due to a slightly older workforce and that the general health of Americans is getting worse.

 

"In what continues to be an uncertain economic environment, organizations cannot afford health care costs growing at 7 percent each year," said John Zern, executive vice president and the Americas Practice Director for Health & Benefits with Aon Hewitt.  "While health care reform continues to represent potential systemic change in a few years, employers will continue to shift cost to employees in order to keep company costs to a manageable level." Source: Aon Hewitt

 

Fortunately there are ways to mitigate the increase in costs. Many companies are now instituting wellness plans that allow employees to focus on improving their general health and managing chronic conditions. This approach puts Ben Franklin’s quote, “an ounce of prevention is worth a pound of cure,” into practice. As these programs have time to work their magic, we may begin to see healthcare costs stabilize.

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