Report: Slowdown in rise of medical costs to continue

2013-06-18T00:00:00Z Report: Slowdown in rise of medical costs to continueThe Associated Press The Associated Press
June 18, 2013 12:00 am  • 

WASHINGTON - There's good news for most companies that provide health benefits for their employees: America's slowdown in medical costs may be turning into a trend, rather than a mere pause.

A report Tuesday from accounting and consulting giant PwC projects lower overall growth in medical costs for next year, even as the economy gains strength and millions of uninsured people receive coverage under President Obama's health-care law.

If the calculations are correct, cost spikes because of the new health-care law should be contained within a relatively narrow market segment. That would come as a relief for Democrats in an election year during which Republicans plan to use criticism of "Obamacare" as one of their main political weapons.

"There are some underlying changes to the system that are having an impact, and we can expect lower increases as we come out of the recession," said Mike Thompson of PwC's Health Research Institute, which produced the study. Cost "is still going up, but not as much as it used to."

The report comes with a caveat that self-employed people and others who buy coverage individually could well see an increase in premiums in 2014.

The reasons have to do with requirements in the law. For example, starting next year insurers must accept patients with pre-existing medical problems, who cost more to cover. Also, new policies have to provide more benefits in some cases than what's now offered to individuals.

About 160 million workers and family members now have job-based coverage and are less likely to be affected.

The individual market is much smaller, fewer than 20 million people. Still, it's expected to grow significantly over the next few years as a result of the health-care law, which will also provide tax credits to help many people afford their premiums.

The US spends more than $2.7 trillion a year on health care.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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