Employer health care costs projected to rise by nearly 10% in 2008 and 2009

Employer health care costs are expected to increase by 9.9% in 2008 -- more than double annual inflation rates -- and 9.6% in 2009, according to a study released Tuesday by PricewaterhouseCoopers, the AP/Minneapolis Star Tribune reports.

For the study, PricewaterhouseCoopers surveyed more than 500 employers and health plans covering more than 11 million U.S. residents.

The study reported two factors driving the increase: hospital building, including replacement of facilities and creation of outpatient treatment centers; and an increase in expenses for insured residents to offset the cost of the uninsured. According to the report, cost shifting due to the uninsured, Medicare and Medicaid will account for one in every five dollars spent by private insurers in 2009.

"Health care providers, insurers and employers will have to monitor medical costs carefully if we are to avoid a resurgence of the double-digit annual increases seen in the past," David Chin, leader of the Health Research Institute at PricewaterhouseCoopers, said (AP/Minneapolis Star Tribune, 6/16).