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US Health Spending Expected to Grow 5.8% Annually

Estimates project aggregate health care spending in the U.S. will grow at an average rate of 5.8% for 2012-2022, according to data released from the Office of the Actuary at the Centers for Medicare and Medicaid.

The increase is one percentage point faster than expected in the gross domestic product so that the health care share of the GDP in 2022 is projected to reach 19.9%, up from 17.9% in 2011.

These projections reflect a combination of factors affecting health care spending, including forecasted changes in the nation’s economy and provisions of the Affordable Care Act.

For 2013 health care spending was projected to remain under 4% because of the sluggish economic recovery, slowed growth in Medicare and Medicaid spending, and continued cost-sharing requirements for the privately insured.

But starting in 2014, growth in national health spending is expected to accelerate to 6.1 percent. The sharp rise in the coming  year is mainly due to the expanded insurance coverage as a result of the ACA, though either Medicaid or other marketplaces.

The use of medical services and goods, especially prescription drugs and physician services, among the newly insured is expected to contribute significantly to spending increases in Medicaid and private health insurance. In addition, out-of-pocket spending is expected to decline 1.5% in 2014 because of new overages and lower cost sharing for those with better coverage.

Further analysis may indicate these increases may not be cause for alarm, however. The Office of the Actuary also studied the relationship between economic growth and health spending over the past 50 years. It suggests that health spending growth is likely to accelerate once economic conditions improve markedly.

“Although projected growth is faster than in the recent past, it is still slower than the growth experienced over the long term,” Gigi Cuckler, lead author of the study, said.

To learn more about the reasons for the spending increase, read the press release provided by Health Affairs.

 

2014 Tax Provisions of the Affordable Care Act

With the enactment of the Affordable Care Act and Health Care and Education Tax Credits Reconciliation Act of 2010, comes new provisions and changes to the US tax code, creating tax implications for individuals and businesses.

Healthcare Exchanges (Marketplaces) are now open – some are run by the state you live in, while others are run by the federal government.  Please visit the ClaimLinx Exchange for more information.

2014 Health Care Reform Law & Tax Provisions:

  • Individual health care minimum essential coverage mandate/penalties/subsidies.
  • Individuals may be eligible for the new advance Premium Tax Credit that will lower your monthly premium.
  • In 2014, the basic penalty for individuals not adhering to the mandate is $95 or 1% of your yearly income (whichever
  •   is higher), with substantial increases in subsequent years.
  • Exchanges are available to individuals and small businesses.
  • Small Employer Health Care Tax Credit
  • No annual limits on coverage in grandfathered individual and group plans.
  • No preexisting condition exclusions for individuals.
  • Employee awards for wellness programs permitted
  • Annual fee on health insurance providers (for net premiums written after 2012).
  • Increases in required estimated tax payments for large corporations.
  • Flexible Spending Arrangements (FSA) contributions are limited to $2,500 per year starting in 2013 and indexed for inflation after     that.

For more information please visit the Health Care Reform section on our website.  For a free brochure, please email service@claimlinx.com.

If you have additional questions, please feel free to contact us at 513-677-6262; (800) 858-1772 or service@claimlinx.com  – we would be happy to help.

Making the Most of Customer Complaints

No company is perfect. It’s simply a fact, not an excuse.

That is why it is important for businesses to realize that the way they handle customer complaints is just as important as trying to provide great service in the first place.

Customers and clients are constantly judging companies for service failures. First, they judge the company on how it handles the issues and then on its willingness to make sure similar problems don’t happen in the future.

Most companies limit service recovery to the staff that directly deals with the customer. Often customer service sorts out the immediate problem, offers an apology or some compensation and then assumes all is well.

But in the end this approach is damaging because it does nothing to address the underlying problem, ultimately guaranteeing similar issues will arise.

What businesses should be doing is looking at service recovery as a mission that involves three parties: customers who want their complaints resolved; managers in charge of addressing the concerns; and the frontline employees who deal with the customers. All three must be integrated into addressing and fixing service problems.

Here are some quick strategies for real resolutions when it comes to improving service recovery:

  • Create and apply a “service logic” – This should be a mission statement or summary of how and why your business provides its services. It should integrate the goals of the service, customers and employees. The result should serve as a guide both for delivering service and for help with service recovery.
  • Draw attention to success – You can use in-house publications, intranets or training programs to share stories that emphasize your company’s values and culture. Just don’t forget to highlight the heroes of service-recovery stories.
  • Collect and share data – Companies must gather more feedback about poor service, record it and make it accessible. This will help equip managers and other employees with strong information to be effective at resolving disputes.
  • Measure employee performance – Positive reinforcement and incentives should be offered for solving problems and pleasing customers. Likewise there should be disincentives or demerits for poor handling of customer complaints.

To learn more about how to improve service recovery, read the article by Stefan Michel, David Bowen and Robert Johnston this information was taken from.

Hiring in November & December Bolsters Job Picture

November and December surveys indicate hiring in both service and manufacturing sectors has increased when compared to the previous year, according to the Society for Human Resource Management’s (SHRM) Leading Indicators of National Employment (LINE) survey.

In November, both the service and manufacturing sectors saw significant increases compared with 2012. A net of 34.1 percent of service-sector companies expanded payroll in November, and a net of 40.4 percent of manufacturers added jobs.

“Our survey shows the highest net hiring rates of November in both sectors in four years,” said Jennifer Schramm, manager of the SHRM’s workforce trends and forecasting, in late October upon interpreting the survey information for November 2013.

While December projections for service-sector hiring were not as bright – it is the first month since July 2012 that hiring will not increase compared to the previous year – manufacturing job creation continued to increase compared with a year ago.

The LINE report not only examines employers’ hiring expectations, but also new-hire compensation, difficulties in recruiting top-level talent and job vacancies.

Results indicated a net of 18 percent of manufacturing respondents had a tougher time recruiting in October, an increase of 6.1 points from the previous year. And a net of 17.4 percent of service-center HR professionals found recruiting more challenging, up 5.9 points from a year ago.

This trend continued with the following month’s LINE report. In November, a net of 13.6 percent of manufacturing respondents had difficulty recruiting, an increase of 0.2 points from the previous year. And a net of 18.7 percent of service-sector HR professionals had more trouble recruiting, up 8.5 points from 2012.

Schramm noted in November that “new-hire compensation also inched up slightly in both sectors, suggesting that employers are starting to feel at least some pressure to increase the compensations packages on offers for hear-to-fill positions.”

For more information on hiring projections, read the articles in the November and December reports this information was taken from.

Health Coverage Premiums Rise Slowly Again this Year

Despite a relatively slow rise in costs again this year, premiums for employer health coverage reached above the $16,000 mark for the first time, according to a major survey.

The 4% increase in the cost of a family plan represents the same rate of growth as last year, rising from a cost of $15,745 in 2012 to $16,351 this year. The slowed rate likely reflects employees’ continued tendency to limit the use of health care, said Gary Claxton, vice president of the Kaiser Family Foundation, which performed the annual poll.

However, the exact reason for the relative lull in the continued upward march of health care costs is a topic of debate among health care economists. Some people believe that it is largely a result of the recession, and the effect will likely end when the economy rebounds.

Other economists prescribe to the idea that the downshift may be more tied to permanent changes in how health care is being purchased. For example higher deductibles and increased efficiency among health care providers overall may be slowing the rise in costs.

Claxton said this year’s results showed minimum impact from the federal health law. Most of the major provisions take effect next year, and other, smaller conditions, such as the addition of children up to the age of 26 to their parents’ plans, have already been incorporated into the cost of coverage.

The survey also showed that higher-deductible plans are retaining popularity. The share of employees enrolled in plans that have an annual deductible of $1,000 or more for single coverage hit 38% in 2013, an increase from 34% last year.

For more information on 2013 health care costs, see the article by Anna Wilde Matthews this information was taken from.

ClaimLinx is proactively ready for the many changes of Health Care Reform. For more information, please contact Tom Quigley at tquigley@claimlinx.com or (800)858-1772 X 25.