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Medical Inflation Cost Trends According to CBIZ, the University's benefits consultant, the national rate of inflation for health care averages between 12-20% per year. Double-digit inflation increases are predicted for the next decade. This growing nationwide problem is reflected in the provision of health insurance. The following items contribute to the national increases in health care costs: (1) Prescription drugs - This expense is projected to grow 20 to 30 percent per year over the next several years. (2) New technologies and treatments - The development and administration of new advances in treatment are costly. (3) Increased demand for health care - People with medical insurance seek new technologies and treatments. This leads to more insurance claims for payment by insurance companies. (4) America’s aging population - Eighty million people will turn 50 in the next 10 years. The cost of providing health care to these individuals is tremendous. (5) Increase in uncompensated care - There are an estimated 44 million Americans without health insurance. The cost of providing care to these individuals is borne directly by insured consumers. A February 11, 2004, article on PRNewswire outlines new federal government
projections that U.S. health care spending will reach nearly $3.4 trillion
during the next ten years, nearly doubling in the next decade and consuming
close to one-fifth of the nation's economic output. Prescription drug
spending growth is forecasted to continue its decline in 2004. Information Sources:
http://www.upenn.edu/almanac/v48/n25/HealthCosts.html Please access the following websites for more information on medical cost trends:
http://www.healthinsuranceinfo.net Human Resources/ Benefits
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