By Alex Wayne - 2012-09-25T04:01:00Z

Medical prices accelerated faster than some projections last year and the number of uninsured is rising, according to data that show the U.S. goal of expanding health care is veering onto a more difficult road.

Costs for people with employer-sponsored insurance plans jumped 4.6 percent in 2011, more than the governments 3.9 percent estimate for the entire health system, the Health Care Cost Institute, which analyzed claims from UnitedHealth Group Inc. (UNH), Aetna Inc. (AET) and Humana Inc. (HUM), said today. A study by the U.S. Centers for Disease Control and Prevention found the number of people without insurance climbed 1.7 percent in the first quarter of 2012.

The data pose a challenge for the Obama administration as it carries out the 2010 Affordable Care Act, which promises to expand coverage to 30 million Americans starting in 2014 and trim health costs. The CDC reported that 47.3 million people lacked insurance, and the health institute said hospitals and doctors raised prices at a clip that outstripped demand.

If you dont bend the cost curve, ultimately insurance gets more expensive, said Douglas Holtz-Eakin, the president of the American Action Forum, a Washington-based advocacy group that opposes the health law. Its a big problem for the Affordable Care Act.

The overhaul law may be contributing to higher costs, said Martin Gaynor, an economics professor at Carnegie Mellon University and chairman of the Washington-based Health Care Cost Institute. The act tries to limit insurers administrative expenses and profits by requiring companies to spend at least 80 percent of their premium revenue on medical services. To meet that threshold, they may be letting prices rise, he said.

Like anything else, sometimes these things can have unintended consequences, Gaynor said in a telephone interview.

Health-care costs for 40 million workers covered by UnitedHealth, Aetna and Humana -- three of the four largest U.S. health insurers by revenue -- increased to $4,547 a person, from $4,349 a year earlier, according to the institute. The group, created last year to analyze claims data from major insurers, found that charges for hospital emergency rooms rose 9.1 percent in 2011, after adjusting for a reduction in the intensity of care they delivered.

That means emergency rooms did less for more money, said David Newman, executive director of the institute.

The law also has encouraged consolidation among hospitals and doctors, which may lead to greater pricing power, said Holtz-Eakin, who once who ran the nonpartisan Congressional Budget Office after leaving the Bush administration in 2003.

Original post:

Health-Care Price Rise Poses Challenge for U.S. Overhaul