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Healthcare in the World of COVID – What Does This Mean For You?
As we grapple with a global pandemic, the first thought on most people’s minds is probably not “So how much will healthcare rates rise?” While I am sure we all have much larger issues to deal with, this may be a question worth considering.
According to a recent study by the Office of the Actuary at the Centers for Medicare and Medicaid Services, national healthcare costs are expected to increase an average of 5.4% per year through 2028, which is higher than the expected rate of inflation and GDP growth alike. This projection was made without accounting for the impact of COVID 19 which is expected to cost between $362 billion and $1.449 trillion.
So, what does this mean for you?
- Pre-COVID healthcare costs are expected to rise 5.4% per year on average (due to a combination of higher costs for supplies and services and an aging population).
- With COVID, costs are very uncertain and could be significantly higher than pre-COVID projections.
- As healthcare costs rise they represent an increasingly large portion of your overall budget
- Given that many Municipalities are already facing tight budgets, some may find rising healthcare costs difficult to manage
- As healthcare costs rise, so does the cost of OPEB benefits.
Key Takeaway: Don’t wait! Evaluate your OPEB plan and your medical plan offerings today and if necessary, make changes to ensure the viability of these benefits well into the future.
If you would like to read the full article regarding rising healthcare costs it is available here: https://www.healthleadersmedia.com/finance/national-health-spending-growth-projected-54-annually-through-2028
If you would like us to evaluate your OPEB plan to determine potential changes, or if you have any other questions, call or email us anytime.
About Sarah F. Rothenberg, ASA, MAAA
Sarah has a Bachelor of Science in Mathematics from the State University of New York at Brockport and is a Member of the American Academy of Actuaries and an Associate of the Society of Actuaries.
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