Health Care Costs To Rise 15% for Large Companies in 2003, Survey Says

Large companies will spend an average 15% more on the cost of health coverage for employees next year, according to a study released yesterday by Hewitt Associates, the AP/New York Times reports. In the study, Hewitt researchers analyzed a database of 2,000 health care plans in 139 markets and found that the cost of health insurance for employers will increase 15.4% in 2003, compared to a 13.7% rise this year. Health insurance premium rates for HMOs will increase 16%, and those for preferred provider organizations will rise 15%, the study found. According to the study, the average cost of health coverage per employee will rise from $5,456 this year to $6,295 in 2003. Jack Bruner, national health care practice leader for Hewitt, said, "Unless there is a fundamental change in how health care is delivered, costs will double in the next five years. This is a major concern for senior management as it impacts the bottom line of companies across the country." In response to the expected cost increase, the study predicted that many large employers will begin to require employees to pay a larger share of the cost of their health insurance. The study estimated that the average employee contribution toward health insurance will increase to 19% of the total cost for individuals and 24% for those with dependant coverage. The study also found that many employers are considering health plans that require employees to "take responsibility for their health care spending" (AP/New York Times, 10/15). In addition, the study found that some companies have revised prescription drug coverage for employees and have contracted with health plans that offer disease management programs to reduce costs (Hewitt Associates release, 10/14).