Health Care Costs to Continue Rising for Employers, Study Finds

Aug. 18, 2010— -- Employers are bracing for more health care cost increases over the next few years as the new health care law unfolds, according to a survey released today.

The National Business Group on Health's annual survey on health care plans found that more than half of the U.S. employers it surveyed were planning to make changes to their plans even though they might lose their "grandfather status." "Grandfather status" applies to those insurance plans that existed on or before March 23, 2010, to which no major changes have been made. It is in keeping with President Obama's pledge that those Americans who like their plan, will be able to keep it.

The NBGH estimates that more than 50 percent of health care plans will lose their "grandfather status" after the first year. But they are likely to still keep offering the older plans for employees who want to keep them, alongside new insurance plans that offer provisions and benefits mandated by the new law.

U.S. employers continue to struggle with health care costs, a trend that began 20 years ago, Helen Darling, the group's president, said at a news conference today.

"They're going to be paying the tab for a very long time," Darling added.

To cut costs and limit spending, employers are promoting cost sharing and shifting more costs to employees, according to the survey.

The survey was conducted from May to June. Even though it was right after the health care law was passed and some rules have since then changed, employers had a "pretty good sense of where this was headed," Darling said.

Most of the changes are expected to come in 2012 and in 2014, when insurance exchanges -- marketplaces where eligible people can shop for coverage -- are expected to start.