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Hewitt Analysis released its annual projections for employer sponsored health insurance plans for 2011. The news isn’t promising, then again, few thought that it would be. The report, released in late September, says costs will increase, once again, next year. And these increases could hit up to 9%. A. Harrison Barnes, attorney and LawCrossing.com founder, says this averages out to slightly more than $9,820 per year. It’s important to keep in mind these figures are only representative of premiums paid by employers and employees and in no way are indicative of out of pocket expenses, co-pays and other policies that might have an effect on what one might ultimately pay.
The Hewitt Analysis also says this is the biggest increase since 2005 and is driven by current economic factors, which aren’t going to improve tremendously in the short term. In 2007 and 2008, the increases in costs hovered around 6%. This certainly provides contrast, says the LawCrossing.com founder – and evidence that the economy isn’t as strong as some would have Americans believe. So what are the factors that are all coming together to define this perfect storm? Consider these:
- Employers still are not hiring the way economists hoped they would
- HMOs are already expected more than 9% increases
- PPOs are expected to increase by about 8.5%
- The workforce is aging with many baby boomers still working
These are all important considerations, says A. Harrison Barnes. The message continues to be that the economy is on its way up, but frankly, few, if any Americans have yet to see proof of that – and few have faith that it’s on the immediate horizon. “Many are still struggling just to make their monthly payments on utilities, never mind maintaining their COBRA payments”, says one analyst. “For many, they’re relying on a prayer far more often than they are the phone ringing with a job offer”. With few promising reports coming out of Washington, this remains, for too many, a continued game of “wait and see”.
For now, more than 42 million Americans remain uninsured, including more than 10 million children under the age of 18. A. Harrison Barnes explains that 78% of Americans have been uninsured for more than twelve months, compared to only 29% in the mid-1990s. Couple this with more Americans living at or below the poverty line and it becomes clear these new policies have fallen severely short. Interestingly, more than 80% of the uninsured Americans today have, in the past, had long term health insurance. This too speaks loud and clear about the current failures in policies.
Higher rates, fewer who are insured and a growing number of poverty-ridden families serves no purpose for anyone and will only lend to more dysfunction and crime throughout this nation until and unless real solutions are found. That’s the challenge for the Obama Administration.