RISING PREMIUMS: Managed Care Sheds its Low-Cost Appeal
Expected health insurance premium increases of 7% to 11% in 2000 are sending some employers "shopping for insurance for the first time in years," USA Today reports. Managed care's promise of flat or declining rates is buckling under burdens of increased drug costs, reduced competition due to hospital, health plan and provider network mergers and having to play "catch-up after initially setting low rates to gain market share." Although it's too soon to say how acutely employees will feel the pinch, Rick Elliott of Marsh, a benefits consulting firm, said, "We'll be back to employers having to make tough decisions about what they can afford." While costs are rising, so is dissatisfaction among health plan subscribers, according to a Hewitt Associates survey of 150,000 workers that saw "unhappiness with managed-care plans [jump] from 17% to 22% from 1997 to 1998." Consumers' top gripes include "plans' inability to solve problems (34%); dissatisfaction with timeliness, professionalism and accuracy (24%); and displeasure with cost (22%)" (Appleby, 5/17).
A Wrinkle in the Trend
An additional factor driving premiums skyward may be America's aging workforce, the Scripps Howard/Washington Times reports. The U.S. Census Bureau reports that the number of Americans ages 45-64 will reach 70 million in 2005 and 80 million by 2020, and it "can be expected that those older workers will cost more to insure than their younger counterparts." James Hartert, medical director of Blue Cross & Blue Shield United of Wisconsin, said the average health care costs for a 50- year-old are double that of a 30-year-old -- a difference the actuarial firm Milliman & Robertson suggests is triple. Most alarming however, may be the lack of strategy among companies in coping with ballooning health care expenses. One means of softening the blow may be increased emphasis on prevention, as "early detection of chronic illness 'may have some big payoffs,'" according to Edward Duthrie, professor of medicine and geriatrics at the Medical College of Wisconsin (Manning, 5/17).