Sept. 11 Attacks Likely to Fuel Health Insurance Premium Hike

Although analysts have already predicted double-digit increases in health insurance premium rates next year, those estimates "do not reflect a probable increase" in mental health costs related to the Sept. 11 attacks on the World Trade Center and the Pentagon, the New York Times reports. Before Sept. 11, analysts had predicted "the largest rate increases for 10 years" for health insurance premiums. Employees at large companies will likely face 15% increases in premium rates, and employees at small firms will face "much sharper" hikes, according to a Hewitt Associates report released in early September. In addition, employees will likely have to pay additional deductibles, additional copayments for prescription drugs and doctor visits and new copayments for hospital stays. Blaine Bos, a William M. Mercer health care analyst, said that double-digit rate increases for health insurance premiums would likely last into 2005. Adding to those increases, "there will be higher health care costs due to Sept. 11, especially in the Northeast," Randall Abbott, a senior consultant at Watson Wyatt Worldwide, said. Health care costs in the Northeast may increase 1% to 1.5%, mainly due to employee assistance counselors referring employees to doctors who prescribe antidepressants, he said. He added, "It will show up in the claim costs of employers during the year and likely would be included in premiums for the coming year. For people who are depressed, medical costs are typically two to three times higher than for those who are not depressed" (New York Times, 10/16).