NCPA - National Center for Policy Analysis

Healthcare Costs To Climb Again

November 11, 1999

In its latest annual survey of employees' health benefits at big firms, Hewitt Associates predicts the health plans' costs will grow at a rate of 8 percent to 10 percent next year.

  • That compares to 0.6 percent as recently as 1995 and 7.8 percent this year.
  • At large corporations, the average employee will pay $110 more next year -- while employers will pay an additional $331 per employee.
  • For the average employee at large firms, the cost of coverage will rise to $4,853 next year from $4,412 this year -- with the employee paying $1,213 of that.
  • Of 16 metropolitan areas studied, cost increases were highest in New York City.

Smaller firms -- those with fewer than 1,000 workers -- may experience larger cost increases because they lack the bargaining power of larger enterprises, the Hewitt report said.

The figures include the employees' contributions to medical premiums, but not the money they spend on co-payments and the like.

Source: David S. Hilzenrath, "8%-Plus Rise Forecast in Health Benefit Costs," Washington Post, November 10, 1999.


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