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Health insurance costs to rise next year, NY Fed says

New York Fed surveys found manufacturers and service

New York Fed surveys found manufacturers and service firms expect to raise premium costs for the next year. Photo Credit: Getty Images

The cost of health insurance will rise next year faster than the rate of inflation for factories in New York State, service firms in the metropolitan area and their respective employees, according to surveys released Tuesday.

The Federal Reserve Bank of New York found manufacturers and service firms projecting a median increase of 10 percent in their expenses for providing medical coverage to workers.

The bank said plant employees were expected to see a median increase of 5 percent in their contribution to the cost of health insurance in 2017 compared with this year.

Workers at service firms were projected to pay 8 percent more, year over year.

The annual inflation rate in the New York metro area has been 1 percent or less since November 2014 in monthly data from the federal Bureau of Labor Statistics.

Earlier this month, the New York Fed polled about 100 factory executives across the state, and separately, about 100 executives of retailers and other service firms on Long Island, in New York City and its northern suburbs.

The surveys found manufacturers and service firms experienced median increases in their health care costs of 8.5 percent in 2016 compared with 2015.

Costs rose for workers at plants by 5 percent year over year, and for employees at service firms, 6 percent.

“Some of the more widely mentioned factors driving up costs included increased premiums from insurance providers, higher costs for prescription drugs, the Affordable Care Act, and an aging workforce,” the bank said.

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