Health Insurance Premiums Expected To Rise 20% in 2003, UCLA Study Determines
Many employers nationwide expect health insurance premium rate increases of 20% or more next year and plan to make "substantial changes" to their health plans to shift more of the cost to employees, according to a survey released today by the University of California-Los Angeles, the Los Angeles Times reports. In the survey, researchers from the UCLA Anderson Forecast interviewed 460 large and small employers in a number of industries. About 25% of respondents said that they expect health insurance premium rates to rise by 20% or more in 2003, and "about all" said that they expect at least a double-digit increase. In response to such increases, about 75% of respondents said that they were "somewhat or very likely" to "substantially revise" their health plans next year. UCLA Anderson Forecast Senior Economist Chris Thornberg said, "We're changing from an era where companies sucked up the increases to where they're going to pass (them) on to employees. [Employers] view this as just the beginning." Although some health care analysts had predicted that defined contribution plans -- in which employers provide employees with a set amount of money to purchase private health insurance -- would "proliferate soon," only 15% of respondents said that they would likely shift to the plans in 2003. Analysts said that employers who offer defined contribution plans face "tax consequences" and the "uncertainties of leaving it up to employees to buy private medical coverage, which typically is more expensive" (Lee, Los Angeles Times, 6/18).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.