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After years of double-digit growth, health care costs in the U.S. have finally slowed their upward trajectory.
But a new report reveals that even with medical costs set to increase by just 6 percent in 2017 and 6.5 percent in 2018, the rise in health care costs continues to outpace the ability of many people to pay for care.
According to a medical cost trend report by PricewaterhouseCoopers (PwC) Health Research Institute, the health care industry’s “new normal” is a single-digit increase in annual medical costs, rather than a double-digit bump like in the late 2000s.
Still, even with the predicted slowdown in soaring medical costs, PwC says the cost trend is “not sustainable.” It recommends that workers, providers and insurers work together to reduce costs.
Kelly Barnes, PwC’s U.S. health industries and global health industries consulting leader, says in a statement:
“Yesterday’s strategy of encouraging lower utilization through increased cost-sharing with consumers has run its course. For medical cost trend to slow further, industry leaders will need to look at new strategies that focus on bringing health prices down.”
PwC says the following factors will push medical costs higher over the next year:
- Rising general inflation: This impacts everything from wages and benefits to medical prices.
- Fewer Americans moving to high-deductible health plans: Although utilizing a high-deductible health plan has been “employers’ go-to strategy in recent years to curb health spending,” it’s a trend that has slowed down considerably.
- Drug patents: There are fewer name brand drugs with expiring patents, meaning employers may have “less opportunity” to push their workers to try a cost-saving generic drug.
If you’re nearing retirement, prepare yourself: Covering out-of-pocket health care costs for you and a spouse during your golden years is estimated to cost as much as $260,000. That includes Medicare premiums, Medicare co-payments and deductibles, and out-of-pocket prescription costs.
You can always look for ways to slash your health care costs. For example, we’ve written about the money-saving potential of shopping around for care:
Websites like Healthcare Bluebook can help you determine fair prices for procedures and services. But ultimately, you’ll need to pick up the phone and start calling to learn what’s being charged in your area.
For more tips, check out:
- “16 Ways to Beat the High Cost of Medical Care“
- “2 Ways to Brace Your Budget for Rising Health Care Costs“
Have you seen a spike in your medical costs? Share your experiences below or on Facebook.