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Employer medical costs to rise in ’11

Associated Press / June 14, 2010

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INDIANAPOLIS — Companies that offer employee health insurance expect another steep jump in medical costs next year, and more will ask workers to share a bigger chunk of the expense, according to a new PricewaterhouseCoopers report.

For the first time, most of the American workforce is expected to have health insurance deductibles of $400 or more, the consulting firm said in a report.

Two years ago, only 25 percent of companies participating in the annual survey said they asked employees to pay deductibles of $400 or more. That grew to 43 percent in 2010 and is expected to pass 50 percent next year.

Employees who are asked to pay more through things like higher deductibles help keep cost growth in check because they use less health care.

The health care overhaul President Obama signed in March has just started to unfold and will have little impact on costs next year, said Michael Thompson, a principal with PricewaterhouseCoopers.

The report found that medical costs are expected to rise 9 percent next year.