PACIFIC BUSINESS GROUP: NEGOTIATES SMALL RATE INCREASE
The Pacific Business Group on Health, "an influentialThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
coalition of major California employers" announced Tuesday that
"it has negotiated an average increase of one percent in the cost
of health insurance for its employees enrolled in HMOs for next
year," Los Angeles Times reports. The increase is below the
inflation rate and lower than the four percent to six percent
increases some analysts predicted for the California employers in
1998, "a sign that health costs aren't climbing as fast as
expected." However, the increase does "confirm a shift toward
rising medical costs for the state's employers." The rise in
medical costs is blamed on "higher drug costs, an aging
population that requires more care and efforts by HMOs to shore
up profits after cutting prices for several years to grab market
share." Pacific Business Group on Health has sought assurances
from HMOs that rates will remain "sable in the future," Times
reports. PacifiCare and Health Net, "[t]wo of the state's
largest HMOs," guaranteed that their rates would not increase
through 2000 (Olmos, 6/18).