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US firms expect healthcare costs to rise at lowest rate since 1997

Los Angeles Times, September 22, 2011

Healthcare expenses for U.S. employers are expected to increase next year at the lowest rate in more than a decade, but the cost of benefits for workers is likely to outpace the growth of their earnings, a national survey has found. Companies expect their bills for health benefits to rise 5.4% on average next year, the smallest increase since 1997, according to preliminary results from a survey of nearly 1,600 employers by benefits consulting firm Mercer. The smaller increase reflects cost-cutting efforts by employers. Many are moving workers into lower-cost health plans or slashing expenses by raising insurance deductibles. In the absence of any cost-cutting, employers said they expect their average health benefit costs to rise 7.1%. That is down from about 9% each of the last five years.