Increased Health Insurance Premiums Will Have ‘Broad Impact’ in Sonoma County Next Year

Increased health insurance premiums will have a "broad impact" on companies and employees in Sonoma County next year, according to a new nationwide survey, the Santa Rosa Press Democrat reports (Rose, Santa Rosa Press Democrat, 12/11). The survey of 2,800 large and small businesses, released Monday by San Francisco consulting firm William M. Mercer, found that the cost of health insurance premiums for employers rose 11.2% in 2001 to about $4,924 per employee and will likely increase an additional 12.7% next year (California Healthline, 12/10). In Sonoma County, residents enrolled in HMOs -- about two-thirds of county residents -- will face up to 17% increases in health insurance premium rates in 2002, the Press Democrat reports. Members of Kaiser Permanente will face 14% increases in health insurance premiums next year, and Health Plan of the Redwoods intends to increase the cost of premiums by 15%. In addition, some HMOs in the county have "levied increases up to 17% on next year's group health plans." The Mercer survey found that nationwide membership in preferred provider organizations has increased at "a far greater rate" than HMO membership, but the trend "does not appear to have taken root" in Sonoma County. According to HPR CEO John Baxter, health insurance "premium costs are being kept in line" in the county by HPR and Kaiser -- not-for-profit "competing medical systems" that offer "low-cost alternatives to PPOs." The Mercer survey also found that employers have shifted health care costs to employees through increased copayments for brand-name prescription drugs and some doctor visits to help reduce the increase in health insurance premiums. Dr. Bob Schultz, medical director at Kaiser Permanente and president of the Sonoma County Medical Association, said that most local employers will increase copayments next year. According to the Mercer survey, however, "eventually ... cost-shifting creates morale and turnover problems as health care becomes less affordable for lower-paid employees" (Santa Rosa Press Democrat, 12/11).