Healthcare Costs Soar Above Overall Inflation
AHIP did a study two years ago estimating that the average family of four paid a "hidden tax" of $1,500 each year to offset underpayments from Medicare/Medicaid.
Given the cost shifting and other pressures on commercial health plans, Zirkelbach says the S&P data do not undermine the claim that commercial plans do a better job containing costs than does the government, despite Medicare's older, sicker population. "I don’t think you can make that judgment. I haven’t seen any evidence to show that," he says. "Keep in mind the government simply dictates the price they pay for services and those costs get shifted on to employers and families in the private sector. It's administered pricing, is how it works."
Maitland said the S&P data reflect an increase in the per capita costs of commercial plans and Medicare, but not necessarily the "total basket" of Medicare costs.
"The total budget may actually be larger but for each person, it is government funded and the government will only allow a certain amount of increases each year. A lot of this simply has to do with government funding and what they will allow in terms of what they will pay," she says. "It's not saying anything about the size of Medicare versus the size of commercial plans. This is per capita."
Maitland said it's also apparent that the commercial plans are also cost shifting their costs to consumers. "If you happen to have commercial health insurance, each of us is paying approximately 9% more than we did for the same services last year," Maitland said. "The cost is not just to the insurance plan, but it's our deductibles and copayments, all of that that is going on. They are passing some of the extra cost on to the consumer directly."
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