San Diego County to See Increase in Health Care Premiums
Health plan premiums could increase by as much as 20% next year for employers in San Diego County, mostly due to rising prescription drug costs and increased use of medical services, the San Diego Union-Tribune reports. A recent Marsh Risk and Insurance Services survey of health plans in the county found that rate increases could range from 15.5% for HMO plans to 18.5% for fee-for-service plans. Hewitt Associates, a benefits consulting firm, said that premiums statewide are "expected to rise in the high single digits to low double digits" in 2002. Other experts say that premiums in the state, which have "historically lagged behind the rest of the country," have finally "caught up." Peter Lee, president of the Pacific Business Group on Health, said small businesses will be "hurt the most" by the increased premiums, adding that some will "drastically cut benefits, shift costs or eliminate health coverage altogether to cope." Health care coverage experts point to rising drug costs and the growing use of medical services to explain premium hikes. According to Linda Keller, a senior vice president for Marsh, employers in San Diego County will experience a 20% to 25% increase in prescription drug costs next year. Besides prescription drug and medical services costs, some analysts believe a "shift in health care provider negotiating power as well as changes in consumer behavior" are responsible for the "sharp" rate increase in the state. Keller said, "'Control is in the hands of just a few providers,' particularly in San Diego, giving them a better bargaining position." The Union-Tribune reports that throughout 2001, providers have taken a "harder stand" against health plans during negotiations, and some are shifting from fixed monthly payments to "better-paying" fee-for-service contracts (Fong, San Diego Union-Tribune, 11/1).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.