PPACA: Mercer Sees Strong Health Care Cost Growth

By Trevor Thomas

November 17, 2010 at 07:00 PM

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Health benefit cost growth accelerated to 6.9% in 2010, following almost 10 years of stable or slowing increases, reports Mercer Inc.

Last year, health benefit costs rose just 5.5%, according to a new study by Mercer, part of Mercer Marsh & McLennan Companies Inc., New York (NYSE:MMC).

Health benefit costs in 2010 averaged $9,562 per employee

Health care reform requirements could add 1% to 2% to health care costs next year, Mercer notes. Employers it surveyed said health care benefit costs could increase 10% next year, but on average they hoped to hold increases to 6.4%.

Many large employers added consumer-directed health plans (CDHPs) in 2010, helping to push up enrollment in these high-deductible plans to 11% of all covered employees. Overall enrollment in CDHPs grew from 9% of all covered employees in 2009 to 11% in 2010. CDHP enrollment has risen by 2% each year since 2006, Mercer reports.

CDHP enrollment rose fastest for employers with 20,000 or more employees. In 2010, 51% of these employers offered a CDHP, up sharply from 43% last year.

Health benefit cost rose three times faster than the CPI in 2010. Cost rose 8.5% among employers with 500 or more employees and 4.4% among those with 10 to 499 employees.

Mercer surveyed 2,836 public and private organizations with 10 or more employees.

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