Thursday, May 31, 2012

Health Costs to Rise Again Next Year

Reuters reports this morning on a study issued by PriceWaterhouseCoopers today, outlining projected trends in the growth of health spending for 2013.  The report predicts a medical cost trend increase of 7.5% in 2013.  As the Reuters story notes, this trend rate is “more than three times the projected rates for inflation and economic growth,” estimated at 2.4 percent and 2.0 percent next year, respectively.  The only piece of “good news” in the report is that employer premium costs may rise by “only” 5.5 percent – because employers will raise things like co-payments and deductibles to avoid passing on the full impact through premium hikes.

Recall that candidate Obama repeatedly promised premiums would go down by $2,500 – and would go down that amount by this year.  For instance, in a speech on February 27, 2008, he said that “We’re going to work with you to lower your premiums by $2,500 per family per year.  And we will not wait 20 years from now to do it or 10 years from now to do it.  We will do it by the end of my first term as President.”  Likewise, in July 2008, Jason Furman – who remains a senior economic advisor within the Administration – told the New York Times that “we think we could get to $2,500 in savings by the end of the first term, or be very close to it.”  Today’s report – which shows costs and insurance premiums continuing to rise unabated – once again demonstrates how Obamacare is failing to live up to candidate Obama’s stated promises.