Archive | Health Care Bill Impact on Business

IRS warned healthcare law could leave millions without insurance

By Julian Pecquet – 11/17/11 03:38 PM ET

President Obama’s healthcare law will leave millions of families without affordable coverage unless tax officials rewrite the rules on who gets subsidies, advocates warned Thursday.

A dozen consumer advocacy groups urged the Internal Revenue Service to allow workers’ spouses and dependents to qualify for tax credits if employer-sponsored family plans are unaffordable. The Treasury Department in August released proposed regulations that grant subsidies to workers and their families in cases when employer coverage costs too much for the employee only, but not when family coverage is out of reach.

The issue risks blowing up in Democrats’ face in 2014, when the subsidies for coverage in state-based insurance exchanges become available. House Republicans have already used the glitch, which The Hill first reported in July, as ammunition to hammer the law for allegedly discriminating against marriage.

Advocates shared their concerns in person with the IRS during a hearing on the tax credits after deluging the agency with comments about its proposed regulation last month. The proposed rule would not penalize families that can’t afford insurance, but advocates say that’s not enough.

“It’s not sufficient not to penalize families — what we want to do is make insurance affordable and get them into coverage,” said Lynn Quincy, senior policy analyst with Consumers Union.

IRS officials listened silently for two and a half hours and asked no questions. The Treasury Department has said its hands are tied because of the way the law was written.

Advocates weren’t having it.

Criticism of the proposed rule, said SEIU healthcare policy coordinator Dania Palanker, “occurred because (it) is in contradiction with the intent of the law.”

Advocates said repeatedly that the Treasury Department has the authority to change the law, as outlined in comments from the liberal Center on Budget and Policy Priorities.

And they downplayed the cost of fixing the problem, citing a new UC-Berkeley micro-simulation study that concludes it would cost much less than the $50 billion a year suggested in an earlier, less thorough study.

“The legal analysis should be enough to make the case,” CBPP Vice President for Health Policy Judith Solomon told The Hill, “but there’s that looming cost issue.”

Advocates also urged the IRS to strengthen the definition of the minimum value requirement for employer-sponsored healthcare plans. The law requires employers to offer plans that cover at least 60 percent of the cost of the benefit or face a penalty.

The SEIU’s Palanker said the law however doesn’t define what those benefits should be, creating a “huge backdoor” for employers to continue offering sub-par coverage that the law seeks to eliminate. She called for employer benefits to be indexed to the government-regulated plans that will be offered on the state insurance exchanges.

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Since Obamacare’s Passage, Millions Have Lost Employer-Sponsored Health Insurance

Nov 11, 2011 • By JEFFREY H. ANDERSON

Throughout the Obamacare debate, President Obama repeatedly promised, “If you like your health care plan, you can keep your health care plan.” Now, Gallup reports that from the first quarter of 2010 (when Obama signed Obamacare into law) to the third quarter of this year, 2 percent of American adults lost their employer sponsored health insurance. In other words, about 4.5 million Americans lost their employer-sponsored insurance over a span of just 18 months.

This is not what the Congressional Budget Office (CBO) had predicted would happen. Rather, the CBO had predicted that Obamacare would increase the number of people with employer-sponsored insurance by now.  It had predicted that, under Obamacare, 6 million more Americans would have employer-sponsored insurance in 2011 than in 2010. The CBO’s projected increase of 3 million under (pre-Obamacare) current law and an additional 3 million under Obamacare). So the CBO’s rosy projections for Obamacare (and even these paint a frightening picture) are already proving false.

Whether the decline in employer-sponsored insurance over the past 18 months is a product of Obamacare or of the Obama economy — and whether Obamacare is the principal cause of the anemic performance of the Obama economy — can be debated. But what’s clear is that, more than 25 months before Obamacare would really go into effect — if it’s not repealed first — employers are already dropping employees from their insurance rolls.

Take Walmart, for example — a prominent Obamacare supporter. Gallup writes,

“The nation’s largest private employer, Wal-Mart, announced in October that new part-time employees who work less than an average of 24 hours a week would no longer be able to get their health insurance from the company. Wal-Mart laid out several other cuts to its health insurance offerings, including some workers’ ability get coverage for their spouses. Other companies have already made and will likely continue to make similar changes to their health insurance benefits….

“If Wal-Mart’s decision is a precursor of how employers intend to manage their healthcare costs, the downward trend in employer-based healthcare will likely continue.”

So in addition to costing about $2.5 trillion over its real first decade (2014 to 2023), looting nearly $1 trillion from Medicare over that time (according to the CBO), forcing Americans to buy government-approved health insurance under penalty of law, and amassing unprecedented power and money in Washington at the expense of Americans’ liberty — if Obamacare stays on the books, you may like your health care plan, but that doesn’t necessarily mean you can keep your health care plan.

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ObamaCare Is A Flop With Small Businesses

From Investors Business Daily 11/10/2011

Health Reform: To the long and growing list of failed ObamaCare promises, you can now add this one: The tax credit that was supposed to cut insurance costs for millions of small businesses has proved to be a complete bust.

Shortly after President Obama signed his signature health reform law, he boasted that it would help the economy, pointing specifically to the small-business tax credit. Under the law, businesses that employ fewer than 25 full-time workers can get a credit of up to 35% of the premiums, climbing to 50% in 2014.

“This health care tax credit is pro-jobs, it’s pro-business, and it starts this year,” Obama said. The administration has since repeated this refrain many times.

Deputy chief of staff Nancy-Ann DeParle claimed that the tax credit is “one of the largest tax cuts for health care in history.” Small Business Administration head Karen Mills said it “will provide about $40 billion in tax relief over the next 10 years,” adding that it is “one of the most significant aspects of health care reform for small businesses.”

And to make sure everyone knew about this great new benefit, the IRS sent postcards to roughly 4 million eligible businesses, did extensive press outreach, organized more than 1,000 events and created a new Web page.

Yet despite it all, a mere 228,000 small businesses — just 5% of those eligible — have signed up for the credit, according to a Treasury Department Inspector General report released this week.

Why were the administration’s forecasts so wildly off the mark?

According to the IG report, one big reason is that the rules were way too complicated for most small businesses, noting that many complained the credit “is not worth the time and effort to claim it.” Among other things, applicants have to wade through seven worksheets.

This is, by the way, precisely what the National Federation of Independent Business — a stalwart ObamaCare critic — said would happen. “Far fewer than 4 million are eligible for the credit as a practical matter and still fewer will be able to avail themselves of the full credit,” it said. “Others who are eligible will find the credit so small and complex that it is not worth the cost of calculation.”

If this were the only way ObamaCare failed to lived up to its promises, it would be bad enough. But this is just the latest in a string of troubling flops. Among them:

• The $2,500 cut in insurance costs Obama promised his reforms would produce has instead turned into a premium hike of $2,400 since he took office.

• ObamaCare was supposed to provide affordable access to hundreds of thousands denied coverage because of pre-existing conditions. But instead, the “high risk” pools have attracted a meager 30,000.

• The initial insurance market reforms, which raised annual payment caps, unexpectedly threatened to push more than 3.4 million into the ranks of the uninsured, forcing the administration to quickly issue more than 1,500 waivers.

• Obama was also forced to abandon the long-term care insurance part of the reform after realizing it was hopelessly flawed.

• And the advertised price tag has already been busted, with the Congressional Budget Office upping the cost by more than 10% to cover unanticipated administrative costs.

Remember: These are all the quick and easy reforms contained in ObamaCare. Given that none of them has worked as promised, imagine the nightmares ahead when ObamaCare’s massive changes kick in after 2013.

We can only hope that a Republican president kills the entire misbegotten law before then, so we’ll never have to find out.

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States worried they’ll bear the brunt of anger over health law’s shortcomings

By Julian Pecquet – 11/06/11 02:39 PM ET  THE HILL.COM

State officials are pushing back hard against what they view as shortcomings in the healthcare reform law for fear they’ll be barraged with complaints when people have trouble affording insurance.

Federal regulators are writing the rules governing key aspects of the law, including the guidelines to determine who’s eligible for subsidies to buy private insurance.

Those benefits will be delivered through state-based exchanges, however, leaving state officials on the receiving end of angry phone calls if glitches in the law aren’t ironed out by 2014.

One key shortcoming is found in the law’s subsidies for people who don’t have access to affordable coverage through their employer. As The Hill first reported in July, the law links the subsidies to the cost of coverage for a single employee. If that coverage is found to be affordable, the individual does not qualify for subsidies in the state health exchanges.

But the determination is based on the single-employee rate regardless of whether the individual has a spouse and/or children, meaning that someone could end up disqualified from the federal assistance, yet unable to afford the family coverage that an employer offers.

“Such an outcome would undermine Maryland’s goal of reducing the number of uninsured residents,” Maryland Health Benefit Exchange officials wrote in comments to the Department of Health and Human Services that were due Monday.

“It could also engender significant frustration with the Exchange among affected families.”

Some states are worried about a particularly powerful constituency: state workers.

North Carolina, for example, fully subsidizes healthcare coverage for its employees, but doesn’t pay a cent of their dependents’ health insurance costs. The average cost of basic family coverage is $516 per month, which is out of reach for many state workers.

“Because employee-only coverage for this plan is provided at no cost to the employee, based on the proposed regulations all family members would be prohibited from accessing subsidies through the Exchange,” North Carolina Commissioner of Insurance Wayne Goodwin wrote to HHS. “This rule puts state employees at a disadvantage as compared to other workers in the state.”

Michigan, which is a party to the 26-state lawsuit seeking to overturn the healthcare law, told HHS that federal officials — not states — should be responsible for hearing appeals from people who are denied subsidies.

And Tennessee points out that states without an individual income tax have no data source to determine who’s eligible for the income-based subsidies in the first place.

The deluge of comments over the past week wasn’t the only sign of increased attention by the states.

The new president of the National Association of Insurance Commissioners (NAIC), Florida Republican Kevin McCarty, vowed Friday to defend state powers threatened by federal intrusion.

“Whether it is Dodd-Frank or the Affordable Care Act, the federal government has become increasingly involved in the insurance arena,” McCarty said. “As your president, I intend to vigorously defend the role of state-based regulation, highlight our accomplishments, and continue to work for regulatory modernization and national uniformity to create an insurance framework that benefits both consumers and the insurance industry.”

NAIC consumer advocate Tim Jost this past week urged the group to take a “leadership role” in pressing states to address potential gaps in the healthcare law’s consumer protections.

Self-insured plans are exempt from most of the law’s regulations, Jost pointed out, and policies offered by large employers also don’t have to meet certain requirements.

Jost also said small businesses are shifting toward self-insurance, so employees will be stuck without benefits Congress intended to provide.

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Healthcare law’s popularity hits new low

By Julian Pecquet – 10/28/11 08:50 AM ET

Support for Democrats’ healthcare reform has hit its lowest point since the law passed in March 2010, says a new monthly poll from the Kaiser Family Foundation.

After months of split support for the law, 51 percent of respondents to the latest poll had an unfavorable view while only 34 percent had a favorable impression.

The key reason for the change, the poll found, was Democrats’ waning support: Even though they remain more favorable to the law than Republicans and Independents, the proportion of Democrats with favorable views has decreased from about two-thirds to just 52 percent in October.

The poor polling numbers all but ensure that the law will be a handicap for many Democrats — and the president himself — going into the 2012 election. They also suggest that Republicans’ constant hammering at the law has been effective: Only 18 percent of respondents now expect that they and their families will be better off thanks to the law, down from 27 percent just last month.

The poll caps several weeks of bad news relating to the law.

Late last month, Kaiser released its annual report on healthcare premiums showing a 9 percent hike in family premiums this year. Rather than driving premiums down by $2,500, as President Obama promised during the 2008 campaign, the healthcare law is responsible for about one sixth of that increase, according to Kaiser.

And earlier this month, the administration announced that the law’s long-term-care CLASS program was unsustainable and that it was dropping it. The move has infuriated many of the law’s supporters, who feel the Department of Health and Human Services hasn’t been honest about its intentions.

The poll also could carry some good news for GOP presidential candidate Mitt Romney. Even as his primary opponents are trying to link his Massachusetts healthcare reform plan to the federal law, nearly seven in 10 likely Republican voters say they don’t know enough about the Massachusetts law to have either a favorable or unfavorable opinion of it. And 71 percent couldn’t say whether the law was similar to the national healthcare reform law.

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Healthcare reform penalizes married couples, says report

By Julian Pecquet – 10/27/11 06:00 AM ET

President Obama’s healthcare law penalizes married couples by making it tougher for them to get insurance subsidies, Republicans charge in a new report obtained by The Hill.

The 22-page report from House Oversight Committee Chairman Darrell Issa (R-Calif.) concludes that married couples will get only 14 percent of the law’s tax credits, even as more than 7 million mostly single people cease paying income taxes altogether.

It is based on a staff analysis of new information provided by the nonpartisan Joint Committee on Taxation.

By raising questions about the law’s subsidies, Republicans are seeking to undermine one of its most popular provisions. Seventy-nine percent of respondents favored the subsidies in a January Kaiser Family Foundation/Harvard School of Public Health survey.

In contrast, 50 percent of those polled by Kaiser said they opposed the law, compared to 41 percent who supported it.

“While the intent of the [healthcare reform law] was probably not to penalize marriage and take millions of people off the tax rolls,” the report concludes, “it will be the result.”

The report is expected to be made public ahead of an Oversight Health panel hearing on Thursday. The title of the hearing is “ObamaCare’s Hidden Marriage Penalty and its Impact on the Deficit.”

The report concludes that fewer than 2 million couples — out of 60 million nationwide — are projected to benefit from the insurance subsidies, while “almost half of the beneficiaries of the tax credit will be unmarried individuals without dependent children.”

“These numbers,” the report says, “suggest that an impact of the [law’s] health insurance tax credit will be to introduce a significant new marriage penalty into the tax code.”

Issa’s report says two main factors combine to discriminate against married couples.

One reason is that subsidies, which start in 2014, are tied to the federal poverty level, which does not increase proportionally along with household size.

Another problem is a snafu in the law that The Hill first reported back in July.

The law offers insurance subsidies for workers if their employer doesn’t provide affordable coverage, but proposed regulations released in August peg that affordability to individual, not family, coverage. As a result, a worker’s spouse and children would not have access to subsidies if that worker were offered affordable coverage — even if the worker could not afford the family coverage offered by the employer.

Republicans argue that creates an incentive for employees to ask employers to drop coverage so their families can go into the federally subsidized exchanges, driving up the federal deficit.

The discrimination charge is especially damaging because many of the administration’s allies on healthcare reform share similar concerns.

The American Academy of Pediatrics, for example, is spearheading a sign-on letter to the Centers for Medicare and Medicaid Services (CMS) that decries a “family penalty” that will “negatively impact the opportunity to access quality health insurance for significant numbers of children.”

The letter, obtained by The Hill, urges the Treasury Department to “use the discretion it has under the [health law]” to base tax credit eligibility on family coverage, but Treasury officials have said their hands are tied because of the way the law was written.

“The policy result of the Treasury interpretation violates the intent of the Affordable Care Act and would impact the families of millions of children without affordable coverage,” argues the letter from the pediatric group, a supporter of the healthcare law.

Some supporters of the healthcare law said the GOP is singling out the subsidies in the healthcare law for criticism even though tax credits often benefit single people.

Judith Solomon, vice president for health policy at the liberal Center on Budget and Policy Priorities, said it’s not unusual for tax credits to be pegged to the federal poverty level, which assumes that people benefit from economies of scale when they’re living together.

She also pointed out that one of the Republican witnesses testifying at Thursday’s hearing estimates that pegging subsidies to family coverage would cost the government an extra $50 billion a year.

Solomon said Republicans aren’t interested in fixing the problem they are spotlighting given the cost.

Issa’s report also raises concerns with the tax rolls.

About 85 percent of filers who claim subsidies will end the year with zero or negative income tax liability, the report concludes. By 2020, the subsidies will “directly move between 7.4 million and 8.1 million tax filers off the tax rolls.”

Furthermore, because the tax credit is refundable — meaning eligible people can get back more from the government than they ever forked over — some 11.3 million people will have negative income tax liability and “will no longer pay the cost of government by contributing federal income taxes.”

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Why Obamacare Might Cost You a Job

The Heritage Foundation 10/14/11

Back in February 2010, when Congress was still debating the Obamacare legislation, then-Speaker of the House Nancy Pelosi (D-CA) proclaimed to America that the law “will create 400,000 jobs almost immediately.” But according to a new report by Heritage’s James Sherk, Obamacare will have the opposite effect, pricing many unskilled workers out of full-time employment due to the law’s requirement that employers offer health benefits to full-time employees.

According to Sherk, the minimum cost of employing full-time workers under Obamacare amounts to an average of $27,500, more than what many unskilled employees produce. He explains in his paper, “Obamacare Will Price Less Skilled Workers Out of Full-Time Jobs” why increased costs will lead employers to shift to employing part-time workers:
After paying the new health premiums, the minimum wage, payroll taxes, and unemployment insurance taxes, hiring a full-time worker will cost employers at least $10.03 per hour. Full-time workers with family health plans will cost $13.75 per hour.

Employers who hire workers with productivity below these rates will lose money. Businesses employing less skilled workers will probably respond by dumping their employees onto the federally subsidized health care exchanges and replacing full-time positions with part-time jobs.

Fewer full-time jobs in favor of more part-time positions is not what America needs, particularly as it struggles with a stagnant economy, 9.1 percent unemployment, and 14 million people out of work. But just when the United States needs businesses to expand, grow, and invest, Obamacare is piling on the costs and regulations–making it more difficult for businesses to create new jobs.

Under the law, businesses with more than 50 workers must purchase more expensive government-approved insurance or pay a penalty, thereby reducing the amount of capital they have to invest in expanding and hiring new workers. That requirement also has the effect of incentivizing businesses with fewer than 50 employees to maintain their size to avoid the costs. And then there’s the uncertainty that Obamacare has brought about–businesses don’t know what their future costs will be under the legislation, making it difficult for them to plan for the future.

America might already be seeing the job-killing effects of the President’s signature law. Sherk writes that following Obamacare’s passage, economic growth in America changed course:
Initially, the economy appeared on track for a steady recovery. The economy went from losing 841,000 jobs in January 2009–the recession’s low point–to gaining 229,000 jobs in April 2010…

Within two months of Obamacare’s passing, the recovery stalled… In May 2010, the job situation stopped improving. Job creation dropped to just 48,000 net private sector jobs, and private-sector hiring took a new course. From May 2010 onward, private job growth improved by only 6,500 jobs per month–less than one-tenth the previous rate.

Though correlation doesn’t prove causation, the economy’s slowdown following the passage of Obamacare, when considered alongside complaints from business owners about the law’s effects on new hiring, should cause alarm for anyone who cares about unemployment in America. Heritage’s Nina Owcharenko explains why the law is the wrong prescription for turning the economy around:
Obamacare is perhaps the most damaging of the Administration’s policies that are impeding the country’s recovery. At a time when there should be a focus on cutting spending, reducing regulation, and lowering taxes, Obamacare does the complete opposite. It spends more, imposes costly new mandates and regulations, and raises taxes on individuals and businesses. This is no way to get the economy up and running again.

Unfortunately, Obamacare will make an already bad economic picture worse. Unskilled workers are struggling to find employment, and the President’s health care law will make finding full-time jobs even more difficult. If President Obama truly wants to reduce unemployment and help businesses grow, he should admit that Obamacare was a mistake and work with Congress to repeal it.

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Temp Agencies: PPACA Employer Mandate a Bad Fit

October 6, 2011 By Allison Bell

 

Staffing industry representatives are asking Congress to exempt temporary workers from employer health insurance requirements set to take effect in 2014 or at least lighten the load.

The witnesses appeared today at a hearing on the effects of the employer penalty provision in the Patient Protection and Affordable Care Act of 2010 (PPACA) on temporary workers and their employers.

The hearing was organized by the U.S. House Government Affairs and Oversight Committee health subcommittee.

The PPACA employer mandate provision will require employers classified by the government as “large” to offer comprehensive health coverage to permanent, full-time employees starting in 2014 or else pay a penalty.

Employers that offer group health coverage could still end up paying a penalty if the employee’s share of the premiums for the lowest-priced individual plan available exceeds 9.5% of the employee’s income. The Internal Revenue Service has proposed that an employer could assume that the compensation it will be reporting on a worker’s Form W-2 is that employee’s income for health coverage affordability calculation purposes.

Christopher Spiro, managing director for health policy at the Center for American Progress Action Fund, Washington, an organization that supports PPACA, says PPACA and the federal agencies implementing it are trying to be as practical and flexible as possible when implementing provisions that would affect temporary workers and the temps’ employers.

The provision applies only to employers with 50 or more full-time employees, and that means 96% of employers will be exempt, Spiro said in written testimony posted on the committee website.

The provision also exempts seasonal workers and workers who work less than 30 hours per week, and an employer can calculate a worker’s hours either month by month or, in a procedure proposed by the U.S. Treasury Department, by using an average calculated using a look-back period of up to 12 months, Spiro said.

But, any method created to ease employers’ burden “must not undermine the purpose of employer responsibility,” Spiro said. “The method must not create an incentive to convert permanent full-time employees into temporary workers.”

Edward Lenz, a senior vice president at the American Staffing Association, Alexandria, Va., praised the Treasury Department’s look-back proposal but would prefer to see temporary workers exempted from “offer of coverage requirements” altogether.

Otherwise, a staffing firm could end up having to make “double payments” and have a strong incentive to stop offering coverage to any employees, Lenz said.

Many temporary workers have coverage from other sources, and they likely would end up with more stable arrangements, such as consistently owned “mini med” plans, or individual coverage purchased through the new health insurance exchanges that are supposed to be created by PPACA, if they do not move in and out of the staffing company’s plan, Lenz said.

John Uprichard, president of Find Great People International Inc., Greenville, S.C., testified that his firm – which has 50 internal employees, a pool of about 375 to 400 temporary workers, an internal annual payroll of $2.9 million, and an annual temporary worker payroll of about $7.4 million – believes complying with the current employer coverage mandate provision without any changes would increase its monthly health benefits costs by more than $62,000, or by more than $744,000 per year.

The administrative costs associated with compliance would be about $40,000 per year, Uprichard said.

“Offering coverage to temporary employees will be virtually impossible because their long hours fluctuate and they would be moving in and out of coverage constantly,” Uprichard said.

The employer and the employee control the hours, Uprichard noted.

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U.S. Health Insurance Cost Rises Sharply, Study Finds

By REED ABELSON New York Times
Published: September 27, 2011

The cost of health insurance for many Americans this year climbed more sharply than in previous years, outstripping any growth in workers’ wages and adding more uncertainty about the pace of rising medical costs.

A new study by the Kaiser Family Foundation, a nonprofit research group that tracks employer-sponsored health insurance on a yearly basis, shows that the average annual premium for family coverage through an employer reached $15,073 in 2011, an increase of 9 percent over the previous year.

“The open question is whether that’s a one-time spike or the start of a period of higher increases,” said Drew Altman, the chief executive of the Kaiser foundation.

The steep increase in rates is particularly unwelcome at a time when the economy is still sputtering and unemployment continues to hover at about 9 percent. Many businesses cite the high cost of coverage as a factor in their decision not to hire, and health insurance has become increasingly unaffordable for more Americans. Over all, the cost of family coverage has about doubled since 2001, when premiums averaged $7,061, compared with a 34 percent gain in wages over the same period.

How much the new federal health care law pushed by President Obama is affecting insurance rates remains a point of debate, with some analysts suggesting that insurers have raised prices in anticipation of new rules that would, in 2012, require them to justify any increase of more than 10 percent.

In addition to increases caused by insurers getting ahead of potential costs, some of the law’s provisions that are already in effect — like coverage for adult children up to 26 years of age and prevention services like mammogram screening — have contributed to higher expenses for some employers.

The Kaiser survey includes both big and small companies using employer-sponsored coverage representing about 60 percent of all insured Americans of working age. The annual growth in premiums, according to the survey, had slowed in recent years to 5 percent, rising just 3 percent in 2010, in part due to the lingering effects of the recession. After years of double-digit increases, the moderation was a welcome relief.

The unexpected increase in premiums raises questions about whether health care costs are, in fact, stabilizing at all, as people have postponed going to the doctor or dentist and have put off expensive procedures. “No one quite knows,” said Mr. Altman.

Throughout this year, major health insurers have defended higher premiums — and higher profits — saying that their expenses would rise once the economy recovered and people believed they could again afford medical care. The struggling economy will probably keep suppressing demand for medical care, particularly as people pay a larger share of their own medical bills through higher deductibles and co-payments, according to benefits consultants and others. About three-quarters of workers now pay part of the bill when they go see a doctor, and nearly a third have a deductible of at least $1,000 if they have single coverage, up from just one in 10 in 2006, according Kaiser.

Although demand for care appears to be growing relatively slowly, insurers and benefit consultants also say prices for medical care continue to climb as prescription drug makers and hospitals charge more. “If they’re a popular brand or anchor hospital, they’re going to negotiate a significant increase if they can,” said Edward A. Kaplan, a benefits expert with the Segal Company, which recently surveyed insurers about medical costs.

The question for employers and insurers is whether the lackluster economy, as well as recent efforts by employer and insurers to better manage the medical care of workers, will keep premiums increasing at a more moderate level. Early responses to a survey by Mercer, a consulting firm, suggest employers are expecting the cost of providing health benefits to go up about 5 percent next year, according to Beth Umland, Mercer’s director of research for health and benefits. These companies may be factoring in the more pessimistic view of the economy, she said, where any recovery seems further off than it did a few months ago.

Employers are reporting that their workers are using less medical care, said Ms. Umland, but they and insurers have been slow to estimate costs that reflect the lower demand. “It always takes a while for underwriting to catch up with reality,” she said.

Some small business say they expect their premiums to moderate, but only because of changes in their work force — partly caused by younger, healthier employees — that make it less likely that the companies will incur high medical claims. “Up until last year, we saw very hefty increases — double digits,” said Heather Gombos, an executive for R. M. Jones & Company and affiliated businesses in New Britain, Conn., a group that insures about 50 of its 80 employees.

Family coverage is now running $12,000 a year, Ms. Gombos said, and she is waiting to see what rate increases her insurer proposes for the coming year. She thinks premiums will not rise as sharply in 2012. “What it comes down to is we’ve had some good luck,” she said.

Some businesses say they anticipate relief from higher costs in the coming year for a variety of reasons. At Ogilvy & Mather, the New York advertising firm, the company believes its efforts to encourage wellness and better oversee its employees’ health through an on-site medical clinic are paying off. “We are not anticipating any cost increase for employer and employee,” said Gerri Stone, the senior partner who oversees the firm’s benefits strategy.

Ms. Stone acknowledged that the firm’s 3,600 employees were relatively young and healthy, helping it avoid some of the sharp increases experienced by other businesses. “We’ve never gone into the double digits,” she said. Family coverage runs about $16,000 a year, she said.

Insurers and benefits consultants say, however, it is difficult to predict whether health care demand will again take off when the economy rebounds or whether some other factor is at play. “We’ve seen a moderation in the increase in health services, particularly in discretionary services,” said Tom Richards, an executive with Cigna. While he attributes some of the moderation to the poor economy, he says the increase in cost-sharing by employees and programs that more closely monitor their health could be having a more permanent impact.

The question, he said, is “what is the economy going to be and what is the new normal.”

Obama administration officials argue that new regulations are forcing insurers to be more circumspect about raising rates. Insurers seeking to raise premiums next year by more than the 10 percent maximum will have to publicly justify their rate increases, and the new law requires the companies to spend at least 80 cents of every dollar they collect in premiums on medical care. If they end up taking too much in premiums, they will have to refund the money to consumers.

But employers and others say much more still needs to be done to control overall costs, especially when workers’ wages are essentially flat. Of the $15,073 in average premiums paid for family coverage, Kaiser found that employees paid $4,129 towards the cost, in addition to whatever out-of-pocket costs they shouldered.

“We’re going to continue to have this yawning gap,” said Helen Darling, the chief executive of the National Business Group on Health, which represents employers that provide health coverage to their workers. Health care costs continue to climb much faster than overall inflation, she noted.

“The health economy acts as if it’s a boom economy,” she said.

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