The healthcare system in the United States is replete with several inefficacies that have resulted in an increase in healthcare costs. Inadequacies such as below par management or services, lack of responsibility, corrupt practices and exorbitant expenses have all led to such a rapid escalation of healthcare costs that it has become difficult and in some cases nearly impossible for employers to continue providing their employees with other benefits.
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One of the most strongly affected employee benefits due to increasing healthcare costs have been retirement benefits. The most common retirement benefits that employers provide to their employees are pension, gratuity fund, healthcare and provident fund. These benefits help in ensuring that the retired employees either have a consistent stream of income or a reasonable amount available to them once they have left the organization.
Although the number of benefits offered to employees varies from employer to employer, yet on a larger scale the trend in the industry has been affected negatively. The relationship between healthcare costs and retirement benefits has been inversely proportional. The rise in the former has lead to a decrement in the latter. In many cases the impact has been so grave that employers have had to completely cut down on certain benefits like entitlement to healthcare after retirement, pension and gratuity fund.
During interviews with managers and employees at different organizations, it was observed that the inflation in the cost of healthcare has lead to immense dissatisfaction among employees. ...
Statement of the Nature of the Issue and its Origins
The burgeoning cost of healthcare has affected employers' healthcare coverage plans and other benefit policies. Of all the benefits issues the most severely affected and neglected one has been that of retirement plans. In the past companies used to provide full coverage of employee retirement benefits but now an increasing number of employees have to bear the burden themselves.
Employees are spending more time at work to earn more in order to meet the demands of the current life style. Improvements in living standards have caused an increase in expenditure on the whole. Owing to this, retirement benefits play an important role in enabling retirees to maintain life styles as they used to lead during employment.
In the past, employers assumed all the risks which came with the benefit plans they offered to their employees. They also made significantly large contributions to these plans. However, with the passage of time, they have been shifting the risks on their employees and minimizing the contributions as well.
Over the past 10 years the inflation in healthcare costs has been unacceptably huge. Pension fund which was already facing a continuous decline was hit hard by this. A pension fund is a sum of money paid regularly as a retirement benefit.
The purpose of this paper is to highlight the impact of rising healthcare costs on the decline in the provision of retirement benefits by employers. It primarily emphasizes the cut down in pension funds to which the employee was initially entitled.
By several measures, health care spending continues to rise at the fastest rate in history.
In 2005 (the latest year data are available), total
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Kaiser Family Foundation Web). The figure means that the current rate of expenditure on healthcare is more than double the amount that was spent in the past four decades. Official figures show that the total amount of expenditure in the year 2010 reached 2.6 trillion dollars.
In 2001, employers saw an annual increase of approximately 10.2 percent, rising to 12.6 percent in 2004 (Weatherly, 2004). Recently, according to Miller (2010), the cost of benefits increased 7 percent in 2010 and is estimated to increase by 8.9 percent for 2011, in spite of proposed legislation and innovative strategies implemented at the Human Resources (HR) level within large organizations across the country (Weatherly, 2004).
However, the uninsured and increasing population of underinsured, the minority groups, as well as the poor have limited or insufficient access to healthcare resulting to poor health outcomes, at times inferior to those available in developing country. As such, provision of affordable, easily accessible, and quality healthcare to the entire American population still remains a challenging encounter.
The United States, despite its claim of providing the best health care service in the world, has a very alarming problem when it comes to its health care system. It is the only industrialized country in the world that does not have the luxury of guaranteeing access to health care as a right of citizenship.
Currently, more than 45 million Americans lack any form of health insurance, and millions more are "underinsured" - they have insurance but lack adequate financial protection from health care costs. While this problem was formerly a problem confined to low-income Americans, more and more middle-class citizens are becoming directly affected by the problem.
Healthcare has increasingly become an issue of concern for many Americans. Because the issue is so intricately tied to other issues of race, class, economic resource it has become charged both politically and socially. “On March 15, 2004, the Wall Street Journal reported the results of a recent survey regarding the economic concerns of the nation.
Another possible solution is health care being given to everyone to promote preventative care. If a change is not made, the country is in danger of worsening dramatically in matters of health and related costs.
More than seventy million Americans don't even have health insurance, and as premiums rise, so will that number.
In our insurance sector, a new product has been launched with the name of High-Deductible Health Plans, which has created a furor resulting in a debate on its implications, benefits and a discussion on the different related aspects.
As the report presents the employer provides this package by consulting vendors who specialize in specific benefits in the benefits package, such as a retirement plan, life insurance, long term and short term disability coverage, and healthcare plan. The individual plans collectively form the employee benefits package.
Some of these factors majorly revolve around the economic improvements realized in the country. In addition, the increasing cost of healthcare is also affected by the change of lifestyle as well as technological advancements (Renter, 2014). Relevant
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