Large Employers Could See HMO Premium Hikes of 50%

Large employers that use HMOs to insure their workers could be "hit" next year with premium increases of "as much as 20% to 50%," according to a recent survey of employer-sponsored health plans, Gannett News/Arizona Republic reports. Large firms, which employ 5,000 or more workers, had expected premium increases of about 11%, according to Blaine Bos, chief analyst for the Mercer/Foster Higgins Survey of Employer-Sponsored Health Plans, conducted by William H. Mercer Inc. Last year, companies paid an average of $3,713 per employee for HMO coverage, with employees paying about $800 of that figure. If premiums increase by 20%, worker contributions would rise 20% as well, about $17 dollars more per month. Still, the premium increases could be a "momentary blip" and not a "solid trend," as the final numbers for the year are still unknown, according to an advisory sent to William H. Mercer clients. Employers using other forms of managed care that are more flexible than restrictive HMOs are expected to see premium increases ranging from about 12% to 15%, Mercer said. In response to the figures, Rick Smith, vice president of policy for the American Association of Health Plans, said, "Anyone can throw out numbers. Some numbers come out early, and you end up with different numbers that are more moderate. The ultimate trend is often lower." However, Kate Sullivan, director of health care policy for the U.S. Chamber of Commerce, said that some employers are so "unnerved" by the expected increases that they are attempting to change the way they insure workers, with some companies exploring self- insurance. But some employers may be hesitant to move to self- insurance because of pending patients' rights legislation that could expose them to lawsuits, Sullivan said, adding, "Everyone's concerned about the risk, and how much is out of their control" (Neus, Gannett News/Arizona Republic, 7/26).