Employers Premiums Predicted to Rise Again in 2002, Marking Fourth Consecutive Year of ‘Significant’ Growth

Large employers receiving their 2002 premium estimates from health plans this month are facing "significant increases" for the fourth consecutive year, the Boston Globe reports. For example, Massachusetts' three largest insurers -- Harvard Pilgrim Health Care, Tufts Health Plan and Blue Cross and Blue Shield of Massachusetts -- will raise their premiums an average of 8% to 15%, and benefits consultants say the increases could be higher nationally. A preliminary survey by Hewitt Associates found that health plans are seeking 20% increases in the Midwest, 17% in the West and Southeast and 15% in the Northeast. Fueling the increases, the Globe reports, are rising prescription drug costs, growing patient demand for "access to the latest technology and top hospitals" and doctors' and hospitals' gaining higher reimbursements from health plans. While many employers plan to increase employee cost-sharing to compensate for the higher premiums, some are concerned that increasing deductible and copayments for yet another year "will annoy and anger their workers." Kevin Counihan, Tufts senior vice president of sales and marketing, said, "Employers are frustrated with the magnitude of the cost. They remember the mid-1990s, when a 1% increase prompted immediate appeals. They remember the good old days [of managed care]. We were lulled into thinking we had a new model that would keep working" (Kowalczyk, Boston Globe, 6/21).