Health Insurance Premiums Increased 14.7% in 2003, Study Finds

Health insurance premiums increased an average of 14.7% nationwide in 2003, raising the average cost to employers to $6,227 for each employee they cover, according to a study released Monday by Hewitt Associates, the Denver Rocky Mountain News reports (Brand, Denver Rocky Mountain News, 10/14). Hewitt researchers analyzed results from a survey of more than 2,000 health plans in 139 U.S. markets; the research also included 300 major employers and more than 16 million health plan members (Austin, Denver Post, 10/14). Researchers compared data from January through September of 2003 with data from the same period last year and found that the average insurance coverage cost per employee is the highest in New York City, at $6,818 per worker, and lowest in San Francisco, at $5,515 per employee (Denver Rocky Mountain News, 10/14). Denver recorded the highest premium increase at 19.8%, followed by San Francisco at 19%, Los Angeles at 17.7% and Houston at 16.2% (Hewitt Associates release, 10/13). Hewitt predicts that premium rates will increase 12.6% nationwide in 2004. In response to rising costs, some employers are planning to implement higher copayments, cost-sharing strategies and altered drug benefits, the Rocky Mountain News reports (Denver Rocky Mountain News, 10/14). In addition, companies continue to increase employees' share of premiums, Hewitt health care consultant David Moody said, the St. Paul Pioneer Press reports. According to the Pioneer Press, the average employee contribution to health insurance premiums in 2004 is estimated to be $1,565, or 22% of the overall premium, compared with $1,276 in 2003 (Forster, St. Paul Pioneer Press, 10/14). The study is available online. Note: You must have Adobe Acrobat Reader to view the study.