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Mercer

While it’s an exciting time to be in our business, staying on top of all the news about the Trump transition and Republican priorities for the 115th Congress can be a little overwhelming. We’d like to help you with that by periodically posting links to key articles. Here’s the first list to keep you up to date -- with our thoughts on which articles to make a priority.

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Last week, The Henry J. Kaiser Family Foundation released new data showing only one in four Americans favor repeal of the ACA. About half of the respondents want Congress to leave the ACA alone or make it bigger and stronger. Contrast that with the results from our latest Mercer poll, where 63% of participating employers said they favored repeal-and-replace of the ACA; only 15% said they oppose; and 22% said they don't have an opinion yet. Why the difference? When pondering repeal, employers may be hoping for elimination of the cost and administrative burdens imposed by the ACA, where individuals may be concerned about losing some of the protections afforded by the ACA – for example, the ban on pre-existing coverage exclusions and coverage eligibility to age 26.

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The reports of steep premium hikes in the public exchanges keep rolling in, raising concerns about their long-term viability. But should we really be worried?  Two recent news items make the case for and against a pessimistic view. 

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There’s a lot of buzz about the health care cost report from the Obama administration just published in Health Affairs. Robert Pear in The New York Times provides a balanced take, but the news is being spun in many different directions. The report estimates that national health spending increased 5.5 percent in 2015, to a total of $3.2 trillion, and will easily surpass $10,000 per person this year. That’s faster than the historically low increases we’ve seen in the recession and years of slow recovery (bad), but still slower than during the two decades prior to the recession (good). One reason for the faster growth is a stronger economy, allowing more people to afford the care they need (good); another is soaring prescription drug costs (bad). The report predicts that health spending will grow an average of 5.7 percent a year from 2017 to 2019 and then 6 percent a year from 2020 to 2025. Our National Survey of Employer-Sponsored Health Plans finds that employers, with a lot of hard work, have been holding average annual increases in health benefit cost per employee to about 4% and expect to do so this year as well. That’s also both good and bad – it’s slower than national spending growth overall, but still faster than inflation and in the long run unsustainable. The most sobering number in the government report? The prediction that by 2025 health care spending will account for 20% of the GDP, a far higher percentage than any other developed country in the world (ugly). Of course, back in 1993, it was predicted we would hit that milestone in 2003 and we didn’t – that’s the good news, if you want to call it that.

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