Health insurance costs to rise under health-care reform

Health insurance spending will rise 12.9 percent in 2014, according to a new government analysis of the health-care reform law.

Jim Bourg/Reuters/File
Bonnary Lek, a manager at Discovery Communications headquarters, is examined by Discovery Wellness Center Medical Director Liz Sequeira during an appointment at the clinic in Silver Spring, Md., in 2009. A new report finds that health-care spending will rise slightly under health-care reform. Large employers are already planning to change the health insurance plans they offer in the wake of the new law.

Watch out for those health insurance costs in 2014.

Under America's new health-care reform act, health-care spending will rise slightly faster than it would have otherwise, according to a new government study. But Americans will have to brace for a big jump in spending, especially on health insurance, in 2014, when major parts of the reform law go into effect.

Health spending will jump 9.2 percent that year, according to the report from Medicare's Office of the Actuary published Thursday in the journal Health Affairs. But spending on private health insurance will bump up 12.8 percent that year as uninsured Americans gain coverage, much of it government-subsidized.

By 2019, the average American will spend $13,652 on health care, according to the report. Without reform, the average would be slightly lower: $13,387 per person. They now spend an average $8,389.

These results suggest that reform's most ardent supporters are wrong. The new act will raise health-care costs, not reduce them, although the increase will be modest during the law's first decade. Averaged over the next decade, the increases in health-care spending will amount to 6.3 percent a year, up from 6.1 percent projected before reform.

By 2019, medical-related expenses will represent just under a fifth – 19.6 percent – of the US economy, up from 17.3 percent last year, according to the report.

Companies are not waiting for 2014 to begin to adjust their health insurance plans in the wake of the new law. They expect an 8.9 percent rise in their health-care benefit costs next year, up from 7 percent this year, according to a survey of 72 of America's largest companies released last month by the National Business Group on Health.

As a result, just under two-thirds of these employers planned to increase the percentage that employees contribute to the premium; 46 percent expected to raise the limits on what workers pay out of pocket before coverage kicks in, the survey found.

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