From the February 2010 issue of Treasury & Risk magazine

Health Costs Set to Rise Faster

The increasing cost of healthcare benefits has plagued employers for years, but at least each year's increase came in a little lower than the year before. But preliminary data indicate that health premiums could show a considerably bigger price increase this year than they did in 2009, suggesting the trend of moderation in healthcare costs has come to an end.

Based on a survey of 842 employers, the Hay Group estimates health premiums will cost companies 9% more this year, vs. the 5% rise in 2009. That would be the biggest annual boost since 2004, when Hay, a Philadelphia-based consultancy, put the annual rise at 11.3%.

The estimate does not take into account changes that employers may make in plan design or administration, and such changes will likely result in a lower price increase, Hay notes.

Hay blames the pick-up on the aging population and the possibility healthcare prices will rise in anticipation of reform.

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