HMO Premiums Could Increase Up to 22% in 2003, Survey Indicates

Many employers will face "steep" increases in health insurance premium rates in 2003 and will likely require employees to cover a large portion of the added cost, according to a national survey released June 4, the Hartford Courant reports (Levick, Hartford Courant, 6/5). In the survey, conducted by Hewitt Health Resource, an online division of Hewitt Associates, researchers interviewed 140 employers with a total of more than one million employees and annual health insurance premiums of about $4 billion. Results indicated that HMOs have asked employers for premium rate increases of 22% on average for next year. Mindy Kairey, a Hewitt consultant, predicted that employers would pass a large part of the increased cost to employees. She said that many employees would face larger premiums and deductibles, as well as increased copayments for prescription drugs, doctor visits and hospital care in 2003 (Freudenheim, New York Times, 6/5). "Companies cannot afford these increases and will have to be even more aggressive in making plan design and employee contribution changes for next year. Unfortunately, this means consumers should expect to pay a lot more for health care," Kairey said. The survey also found that the increased premium rates may prompt more employers to move to self-funded HMOs and to offer fewer health plans for employees. In addition, some employers indicated they may move to health plans with financial incentives that force members to "be more aware of charges for medical care and take on a larger share of the costs" (Hartford Courant, 6/5).