News on Costs: Not So Bad.

• Author: Marshall, Jeffrey
• Position: Brief Article

Business cost hikes will be more tolerable next year, according to The Kiplinger Letter which has offered projections on a series of routine expenses for 2001. Energy costs, which spiked this year, will be lower, Kiplinger says, though health care costs will be up considerably. Overall inflation is projected at just 2.8%.

Kiplinger's forecast of a 12 percent boost in health care costs is matched by Watson Wyatt Worldwide, which is projecting a 12.2 percent hike for overall medical costs for active employees. The consulting firm based its projection on a survey of 61 companies with 1.7 million employees, done in conjunction with the Washington Business Group on Health.

But Watson Wyatt predicts that prescription drug benefit costs borne by large employers will jump 22.5 percent for active...