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Out-of-pocket costs for the millions of Americans with employer-based health coverage rose again in the past year, although at a slower pace than the year before, according to a new industry report released Tuesday.

However, as employers prepare to make health reform’s mandated changes to their benefits plans later this year, the changes could shift some costs away from workers and raise them for companies.

American workers spent 7.4% more on their health care coverage over the past year, according to the sixth annual survey conducted by health care consulting firm Milliman Inc. The increase translates to about $506 more that workers contributed to their care - $321 for their company’s health plan and $185 for employee out-of-pocket expenses.

But, in a bright spot for workers, the increase was lower than the 10.6% boost in the survey a year ago.

"Although employers are still bearing about 60% of their workers’ health care costs, this is a pretty significant amount that employees are paying," said Lorraine Mayne, principal and consulting actuary with Milliman.

"If you think about a family of four with a household income of $50,000, they are paying about 8.7% of their income in employee contribution to their coverage," she said.

The report also showed that employers’ subsidies on their workers’ coverage increased about $797, or 8%, over the past year.

According to the Census Bureau, about 177 million Americans — more than half the population — are covered by employer-provided health insurance.

Under health reform, there are four major near-term changes that companies have to make to their coverage plan that will push up their share of health care costs.

These changes include expanding dependent coverage for adult children up to age 26, removing lifetime and annual limits, eliminating co-payments and co-insurance for certain preventive services, and prohibiting any restrictions of children’s coverage for preexisting conditions.

"For many employees, these changes will increase the value of their benefits," said Mayne. "But for many others, those who don’t have adult children for instance, the changes will have little effect."

Your medical costs

Including both what employees pay and what employers contribute, the total 2010 cost of health care for a typical family of four increased 7.8% to $16,771, according to the Milliman report.

Physicians made up the biggest chunk, at 33% of total medical costs, according to the report. However, the rate of increase in physician costs declined to 5.2% from 6% in 2009.

The fastest growing component of health costs is hospital outpatient care, up 11.6%, compared to an increase of 10.2% the prior year. The report said the increase was driven by increases in the cost of care rather than people using the facility more.

Elsewhere, hospital inpatient costs increased by 9.8% and pharmacy costs rose 6.1%

In a look at 14 metropolitan areas, the report cited Miami, New York and Chicago as three cities where health care expenses are about 10% higher than the national average.

Total health care costs for a family of four exceeded $20,000 in those three cities, with Miami topping out at $22,089.

The Milliman Index is based on a national survey of more than 4,000 employers as well as data from the Kaiser Family Foundation. 

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Gibraltar Private Bank & Trust CEO and founder Steven D. Hayworth has replaced Adolfo Henriques as chairman of the Coral Gables-based bank.

In September, a group of more than 50 local investors led by Hayworth bought the bank from Boston Private Financial Holdings, where Henriques is a board member. During the negotiations to sell the bank to the local group, Henriques took over as chairman.

The former CEO of Florida East Coast Railway, Henriques remains on the board of Boston Private cash advance no fax.

“I will miss my friends on the Gibraltar Private board, but I leave knowing that Steve and his team have created a terrific private bank and wealth management company that will serve our community well in the future,” Henriques stated in a press release.

Gibraltar Private Bank lost $20.2 million in 2009 and ended the year with $1.5 billion in assets.

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Consumer prices in February rose from a year ago amid higher energy costs, but the pace of price increases slowed for the second straight month, the government reported Thursday.

The Consumer Price Index, the government’s key inflation measure, rose 2.1% over the past 12 months, driven by a 37% climb in gasoline costs during the period. In January, prices climbed 2.6% from the previous year.

The so-called core CPI, which is closely watched by economists because it strips out volatile food and energy prices, rose 1.3% over the past year, the smallest gain since February 2004.

February. For the month, overall prices were unchanged as declining energy prices offset increases in prices of food and other items. Economists surveyed by Briefing.com were expecting prices to rise 0.1%. Prices rose 0.2% in January.

Food costs edged up 0.1% during the month, while energy prices fell for the first time since April 2009, posting a 0.5% decline. The drop was due to a 1.4% dip in gasoline prices.

Core CPI for the month rose 0.1%, in line with economists’ expectations and up from the 0.1% decrease in January instant payday loan.

Medical care costs rose for a second straight month and prices of new cars and used cars and trucks were also higher. The costs of clothing and airline fares decreased, while housing costs held steady.

The tame inflation reading supports the Federal Reserve’s decision to continue to hold its key interest rate near zero.

"Core inflation continues to be a non-issue in the near-future, so the Fed’s easy monetary policy can continue into the third and fourth quarter of this year without inflation being an issue," said Adam York, an economist at Wells Fargo.

He added that the oversupply in the housing market will continue to put downward pressure on home prices, which will hold core inflation low for up to a year.

"When the housing market returns to a normal level and then home prices begin rising, inflation will pick up, probably in early 2011" he said. "It will pick up steam throughout next year as we see the economy recover." 

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What is wrong with the vehicles?

Toyota said the accelerator pedal on the affected models can stick in a partially depressed position. It also can be slow to rise back up when you ease off the gas. In some cases, vehicle floor mats can become entangled with the accelerator pedal, trapping it down.

What should drivers do if they find themselves in a sudden-acceleration incident?

Test-track drivers found the most effective strategy was to hit the brake pedal hard and hold it. Don’t start pumping or pounding on the brakes. That kills the vacuum assist and makes them less effective. Toyota advises stepping on the brake pedal with both feet, using firm and steady pressure.

After hitting the brakes, shift the transmission into neutral.

"We found that it is very hard to bring the car to a complete halt with just the brake pedal," said Rik Paul, automotive editor of Consumer Reports magazine. "That’s why it is important to shift into neutral."

After disengaging the engine, pull safely off the road, turn off the car and park it.

Is there some warning that lets me know my car has the problem?

Don’t expect a warning light on the dashboard. You might notice that the pedal is getting harder to depress over time or is sluggish when you ease off the gas. Some drivers might notice a rough or "chatter"-like feeling depressing the accelerator, according to Toyota.

If I think this is happening to my vehicle, what should I do?

Toyota is telling owners to drive the vehicle to the nearest safe location, shut off the engine and contact a Toyota dealer for assistance.

Which models are affected?

Toyota said it stopped sales of the following models and years:

— 2009 and 2010 RAV4

— 2009 and 2010 Corolla

— 2009 and 2010 Matrix

— 2005 to 2010 Avalon

— 2010 Highlander

— 2007 to 2010 Tundra

— 2008 to 2010 Sequoia

The company also stopped sales of certain 2007 to 2010 Camry sedans, depending on where those vehicles were manufactured; Camry owners should check with their dealer to determine whether their car is affected.

What is Toyota doing to fix the pedal issue?

The automaker says it is working on a fix but hasn’t disclosed the details or timing of the remedy. The company insists the problem is "rare and infrequent" and said dealers should deal with customers "on a case-by-case basis."

What should I do if

I have questions?

Call the Toyota Customer Experience Center at

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Savvis Chairman James E. Ousely has been appointed interim CEO at the company after Chief Executive Phil Koen stepped down on Friday, Savvis announced today.

Koen had been with Savvis, the Town and Country-based provider of Internet infrastructure services for corporations, since March 2006. His resignation was effective at the end of last week.

“In consultation with our board of directors, and knowing we have a very strong leadership team in place, this is an excellent time for me to move on to a new opportunity and to watch Savvis continue to grow and excel,” Koen said in a company news release.

He didn’t elaborate on the opportunity that led him to resign.

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Stocks closed sharply lower Thursday after Greece received another credit downgrade and the dollar rose on the U.S. central bank’s cautious comments.

The Dow Jones industrial average (INDU) fell 133 points, or 1.3%. Declines were broad based, with 28 of the 30 Dow components ending lower.

The S&P 500 index (SPX) lost 13 points, or 1.2%. The Nasdaq composite (COMP) slipped 27 points, or 1.2%.

The stock slump came as the dollar rebounded 1.3% against the euro, to its highest levels since September. The greenback was also up sharply on the pound and slightly higher against the yen.

The dollar jumped Thursday for two reasons, according to Craig Peckham, strategist at Jefferies & Co. First, he said, were the "continuing jitters" after the Federal Reserve on Wednesday left interest rates unchanged near 0%, saying weakness would remain for some time. Adding to those fears were reports that Greece has been downgraded by Standard and Poor’s.

S&P’s move came after health care companies complained that the country was behind on payments related to its public health system, and it follows Fitch Rating’s downgrade of Greece on Dec. 8.

Marc Chandler, chief foreign exchange strategist for Brown Brothers Harriman, said those downgrades and persistent worries about the economy are driving up the dollar — and these concerns could carry extra weight amid "very thin" volume ahead of the holidays.

"Santa Claus is giving a little present to people like me, who are dollar bulls," Chandler said.

Despite posting gains early in the session, stocks ended mixed Wednesday after the Fed’s interest rate announcement.

Financials take a hit: The slump slammed several bank shares, with Citigroup (C, Fortune 500) closing down 7.5%, American Express (AXP, Fortune 500) off 2% and JPMorgan Chase (JPM, Fortune 500) down 2.6%.

According to reports, the Treasury canceled plans to start selling off part of its 34% stake in Citi after its offering of 5.4 billion shares of common stock drew weak demand.

The offering was part of a plan Citi announced late Wednesday, in which the New York-based lender said it intends to raise $20.5 billion in the stock market in a plan to pay back its bailout funds.

"The market is struggling to absorb these staggering amounts of new issue," said Jefferies’ Peckham. "Marry that with the overriding theme of caution, and investors will be nervous."

Bank of America (BAC, Fortune 500) said late Wednesday it appointed senior executive Brian Moynihan as its new chief executive officer. Moynihan is currently the president of consumer and small business banking high risk personal loans. Exiting CEO Ken Lewis surprised the board of directors when he announced plans to retire in September. Shares were down 1.1%.

Economy: The Labor Department reported jobless claims rose unexpectedly last week, jumping by 7,000 to 480,000. Analysts predicted a decline to 465,000 new claims.

The November index of leading economic indicators, from the Conference Board, rose 0.9% — beating expectations of a 0.7% jump.

The Philadelphia Fed index, a regional read on manufacturing, far surpassed expectations. The reading jumped to 20.4 in December, the highest since April 2005, from 16.7 in November. Analysts expected a decline to 16.0.

In Washington, a Senate Banking committee voted 16-to-7 to confirm Ben Bernanke for another four-year term running the Federal Reserve.

Companies: Before the start of trading Thursday, package-delivery firm FedEx (FDX, Fortune 500) reported earnings of $1.10 per diluted share, down from $1.58 one year ago.

FedEx issued cautious guidance for the third quarter of 50 to 70 cents per diluted share. That fell short of forecasts of 84 cents per share, and the stock price lost 6.1%.

After the market close Thursday, Oracle (ORCL, Fortune 500) reported a profit of 39 cents a share versus 34 cents a year ago. The software company’s results beat analyst expectations of 36 cents per share.

Also after the bell, Nike (NKE, Fortune 500) reported a second-quarter profit of 76 cents a share, down from 80 cents a share. Analysts were looking for 71 cents a share.

Smartphone maker Palm (PALM) reported a wider-than-expected loss of 37 cents per share in its second fiscal quarter.

Palm’s rival, Blackberry maker Research in Motion (RIMM), earned $1.10 per share, up from 69 cents a year ago. RIM shares were up about 11% in after-hours trading.

World markets and commodities: Stocks in Asia ended mixed, with Tokyo’s Nikkei index falling 0.13% and Hong Kong’s Hang Seng index off 1.22%. European indexes settled lower.

Crude oil for January delivery fell 1 cent to settle at $72.65 a barrel, while gold for February delivery plunged $28.80 to end at $1,107.40 an ounce.

Bonds were higher, with the benchmark 10-year yield slipping to 3.49% from 3.59% late Wednesday.

Market breadth was negative. On the New York Stock Exchange, losers beat winners almost three to one on volume of 1.7 billion shares. On the Nasdaq, decliners topped advancers almost three to one on volume of 1.9 billion shares. 

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Stapleton and NorthSide, by the numbers

Stapleton NorthSide

Land area 7.5 sq. miles 2.3 sq. miles

Projected new homes 10,000 10,000

Projected new jobs 30,000 22,000

Tax increment financing $280 million (so far) $390 million (projected)

Construction start 2001 2010

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Sales at U.S. retailers unexpectedly fell in July, raising the risk that consumers will keep cutting back as job losses mount and temper a recovery from the worst recession since the 1930s.

Purchases decreased 0.1 percent, the first drop in three months, as shrinking demand at department stores such as Macy’s Inc. and Wal-Mart Stores Inc. overshadowed a boost from the cash-for-clunkers automobile incentive program, Commerce Department figures showed today in Washington.

A separate government report today showed more Americans than forecast filed claims for unemployment insurance last week, underscoring the threat to spending from the continued deterioration in the job market. Treasury securities jumped and the dollar fell after the reports, and some economists lowered estimates for growth this quarter.

“Until we start seeing job growth, consumers are still going to be very cautious,” said Michael Gregory, a senior economist at BMO Capital Markets in Toronto, which accurately forecast the drop in purchases excluding automobiles. “It’s premature to talk about the sustainability of a recovery,” he said, until there’s “follow-through on the demand side.”

The gain in Treasuries sent the yield on the benchmark 10- year note down to 3.66 percent at 11:40 a.m. in New York from 3.72 percent late yesterday. The dollar dropped against the Japanese yen to 95.47 yen from 96.06 on Aug. 12. Stocks were little changed.

More Claims

The Labor Department said today that 558,000 people filed first-time claims for jobless benefits last week, up from 554,000 the week before.

Retail sales were projected to rise 0.8 percent, according to the median estimate of 76 economists in a Bloomberg News survey. Forecasts ranged from a decline of 0.9 percent to a gain of 2 percent. Commerce revised June sales up to show a gain of 0.8 percent from the 0.6 percent increase previously reported.

Excluding automobiles, sales fell 0.6 percent, also worse than anticipated and the biggest drop since March. They were forecast to increase 0.1 percent, according to the survey.

Americans cut back on furniture, electronics, building materials, groceries and sporting goods in July, according to the report. The drop in sales at department stores, at 1.6 percent, was the biggest this year.

‘In the Tank’

“It’s hard to find anything encouraging in this report,” said David Resler, chief economist at Nomura Securities International Inc. in New York. “For the most part, discretionary spending is in the tank.”

Walmart, the world’s largest retailer, today reported profit that exceeded some analysts’ estimates after managing inventory to lower costs fast cash. Comparable-store sales trailed the company’s forecast.

The drop in sales was attributable to consumers being “more selective” in buying discretionary items and to larger declines in grocery prices than anticipated, Eduardo Castro- Wright, Walmart’s U.S. stores chief, said on a recorded call.

Macy’s, the second-biggest U.S. department store chain, said yesterday it cut inventories 7.5 percent in the second quarter from a year ago as sales dropped.

Other reports today showed companies trimmed inventories in June for a 10th consecutive month, and prices of imported goods dropped in July for the first time in six months as the cost of commodities such as petroleum and chemicals decreased.

Cash for Clunkers

Figures from the retail sales report showed the government’s cash-for-clunkers plan did boost auto purchases, confirming industry data released earlier this month. Sales at dealerships and parts stores climbed 2.4 percent last month, the biggest gain since January.

The government is offering credits of up to $4,500 to trade in gas-guzzlers for more fuel-efficient vehicles. President Barack Obama last week signed into law an emergency measure giving an additional $2 billion to the program after the original $1 billion ran out three months earlier than projected. The infusion of funds was meant to extend the program through August.

Excluding autos, gasoline and building materials — the retail group the government uses to calculate gross domestic product figures for consumer spending — sales dropped 0.2 percent after no change in June. The government uses data from other sources to calculate the contribution from the three categories excluded.

Forecasts Trimmed

After the report, economists at Morgan Stanley in New York projected the economy will expand at a 3.7 percent annual pace this quarter, down from a prior estimate of 4.2 percent.

The economy has lost about 6.7 million jobs since the recession started in December 2007, the worst of any downturn since World War II. GDP contracted at a 1 percent annual rate in the second quarter, the fourth consecutive drop.

Federal Reserve policy makers yesterday said they will hold the benchmark interest rate “exceptionally low” for an “extended period” to help sustain a recovery. They also added “sluggish income growth” to the list of reasons why household spending is likely to be slow to rebound. Headwinds previously mentioned included job losses, tight credit and falling home values.

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Group of Eight leaders said the economic recovery from the steepest recession since World War II was too fragile for them to consider reversing efforts to pump money into the economy.

President Barack Obama pressed for the door to remain open to more stimulus measures as a renewed stock-market drop stirred concern that $2 trillion spent worldwide so far hasn’t jolted consumers and businesses back to life.

“The G-8 needed to sound a second wakeup call for the world economy,” British Prime Minister Gordon Brown told reporters yesterday in L’Aquila, Italy, after the opening sessions of the leaders’ annual gathering. “There are warning signals about the world economy that we cannot ignore.”

Divergences over what to do next and calls from developing nations to do more to counter the slump underscored the G-8’s limited room for maneuver. The biggest borrowing spree in 60 years has failed to halt rising unemployment and left investors doubting the strength of the recovery. The MSCI World Index of stocks slid for a fifth day. The 23-nation index has dropped 8 percent since a three-month rally ended on June 2.

“Economies still need as much stimulus as possible,” said David Page, an economist at Investec Securities in London. “It’s important not to react too soon to early signs of a pickup or take false comfort from them.”

IMF Forecasts

The International Monetary Fund echoed that skepticism, upgrading its 2010 growth forecast while saying the rebound will be “sluggish” and urging governments to stay the economic- stimulus course.

Emerging countries like China will lead the way, expanding 4.7 percent next year, the IMF said yesterday, up from an April prediction of 4 percent. The Washington-based lender forecast growth of 0.6 percent in the advanced economies, up from expectations of stagnation.

“It’s a very volatile situation,” European Commission President Jose Barroso said in a Bloomberg Television interview in L’Aquila. “We are not yet out of the crisis, but it seems now that the free fall is over.”

In the U.S., a jump in the jobless rate to a 26-year-high of 9.5 percent in June and a 6.9 percent drop in the Standard & Poor’s 500 Index in the past month raised questions whether Obama’s $787 billion stimulus package is turning the world’s largest economy around.

Democrats in Congress are split over whether to spend more, adding to a deficit that the IMF puts at 13.6 percent of gross domestic product in 2009, the highest since World War II.

‘Potentially Counterproductive’

Obama straddled the issue yesterday, telling ABC News that spending more borrowed money is “potentially counterproductive.”

A G-8 statement yesterday embraced options ranging from the second U.S. stimulus package some lawmakers and economists are advocating to Germany’s emphasis on shifting the focus to deficit reduction fast payday loans.

“Exit strategies will vary from country to country depending on domestic economic conditions and public finances,” leaders of the eight economies — the U.S., Japan, Germany, Britain, France, Italy, Canada and Russia — said in the statement.

“There is still uncertainty and risk in the system,” Mike Froman, deputy U.S. national security adviser, told reporters in L’Aquila. While exit strategies can be drawn up, it’s not “time to put them into place.”

Bank bailouts and recession-fighting measures will explode the debt of the advanced economies to at least 114 percent of gross domestic product in 2014, the IMF forecasts.

‘Exit Strategy’

German Chancellor Angela Merkel is the leading opponent of additional stimulus, pushing through a statement at last month’s European Union summit that called for “a reliable and credible exit strategy.”

Merkel, campaigning for re-election in September, has warned against billowing budget deficits, which will rise in the EU to an average of 6 percent of GDP in 2009 from 2.3 percent last year, the EU forecasts.

“We have to get back on course with a sustainable budget, but with the emphasis on when the crisis is over,” Merkel said.

The 16-nation euro economy has shown some signs of resilience since shrinking 2.5 percent in the first quarter, the most since the currency’s birth in 1999. While measures of business confidence, manufacturing and services have ticked up, job cuts by companies from Austrian Airlines AG to ThyssenKrupp AG pushed up unemployment to 9.5 percent in May, a 10-year high.

Asian Resilience

Further signs of a resilience also emerged in the Asia- Pacific region, where governments including China and Australia have boosted spending to increase economic growth. Australia’s jobless rate rose in June by less than forecast, climbing to 5.8 percent from 5.7 percent, a report showed today. Analysts tipped a 5.9 percent rate.

In China, new loans rose almost fivefold in June from a year earlier to 1.53 trillion yuan ($224 billion), the central bank said on its Web site yesterday. China’s passenger-vehicle sales rose 48 percent in June, the biggest jump since February 2006.

Canadian Prime Minister Stephen Harper occupied the middle ground, saying the first priority is to spend wisely what has already been committed.

“Before there’s talk of additional stimulus, I would urge all leaders to focus first on making sure that the stimulus that’s been announced actually gets delivered,” Harper said.

Russia, a G-8 member generally classified as an “emerging” economy, also believes that exit strategies “have to be developed already now,” said Andrei Bokarev, a Russian official.

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