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How ACOs Are Slowing Healthcare Costs

Jacqueline Fellows, for HealthLeaders Media, December 12, 2012

Coauthors of a Commonwealth Fund survey studying health insurance costs from 2003-2011 say premiums and deductibles are increasing at an unsustainable rate, but recent slowdowns over the last two years are encouraging and may be able to continue if more organizations adopt an Accountable Care Organization model.

That news is the report's big takeaway for insurance companies. For consumers, the report starkly points out what they likely already knew: Health insurance is more expensive today than it was in the early 2000s.

The private nonprofit health research foundation's newest report, titled State Trends in Premiums and Deductibles, 2003–2011: Eroding Protection and Rising Costs Underscore Need for Action, shows that over the last eight years, employer-sponsored private health insurance premiums for family coverage rose 62%, three times faster than wages, says Cathy Schoen, the Commonwealth fund's senior vice president for policy, research, and evaluation.

"By 2011, the total annual cost of family plans sponsored by private employers averaged over $15,000/year with the majority of states above $14,000. Even in the five lowest cost states, family plans now are in the $12,500 to over $13,000 range. And, I might add, this is about equal to the total annual wages of a worker working full-time at minimum wage. It's just not affordable without employer health."

Deductibles for single or family plans also increased at both small (less than 50 employees) and large (more than 50 employees) firms. The study shows deductibles for single and family plans more than doubled since 2003, though the increase was slightly lower at large companies.

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2 comments on "How ACOs Are Slowing Healthcare Costs"


Todd (12/14/2012 at 5:11 PM)
We do not all get care locally. People travel overseas for surgery all the time and more will do so in the future.

Jim (12/13/2012 at 10:04 AM)
La-La land at the Commonwealth Fund. Where is the proof? I've spent 44 years working in health insurance - there are pricing variations from year to year, and what we saw in 2012 were price increases that reflect an over-reaction of insurance pricing decisions made in the prior 3 years. Take a look at the pricing reactions for renewals in the first quarter of 2013 - those are proof that PPACA is working.