Medical inflation will decrease in 2014 with health care reform cited as a contributing factor in the decline, according to a report by PricewaterhouseCoopers.
In PwC's Health Research Institute study, the research firm found based on health care spending trend, costs will increase 6.5 percent in 2014. However, analysts revised this projection down to 4.5 percent as providers and other industries attempt to lower their health care costs. Another factor in curbing costs is the adoption of high-deductible health plans. In the study, medical inflation is expected to go down as employers, new venues and models for health care as well as provisions of the Affordable Care Act work together to lower medical inflation rates. Updates for health insurance requirements were considered a main factor in lowering inflation by 2 percent for 2014.
"The ACA will also play a role in the slowdown in 2014, with hospitals working to hold down expensive readmissions (or face the law's penalties) and employers being given greater power to influence employee behavior through increased or discounted premiums – up to 50 percent in some cases," the PwC report said.
HRI Managing Director Ceci Connolly said the spending trend for health care is expected to slow down as consumers still feel the impact of the recession. This leads them to skip doctor's visits or elective medical procedures to avoid costs.
Arkansas politicians expand insurance coverage for low-income residents
Though Arkansas politicians grappled with agreeing to the costs and potential impacts of the health care mandate, they eventually cooperated to expand insurance coverage, The Washington Post reported. In a speech in Arkansas on Sept. 4, former president Bill Clinton encouraged opponents of the health care law to try to improve it rather than appeal it. While health care exchanges are set to open on Oct. 1, some states will choose to expand Medicaid for its poor residents.
Although The Washington Post describes Arkansas as a "major background over the health care law," both parties agreed to approve funding to buy private insurance for thousands of low-income citizens. Clinton applauded this cooperative action by the Republican and Democratic parties.
"My view is Arkansas did a good thing, a bipartisan thing, a practical thing and the rest of us ought to get behind them and help them," he said.
As companies in Arkansas and other Southern states evaluate their options to provide coverage for employees, they could consider hiring HR consulting services to help find the best insurance plan for their business.