HMO premiums rise more slowly than expected

Sunday, June 29, 2003

June 30, 2003

WASHINGTON - HMO premium rates could increase 17.7% in 2004, compared to 21% at the same time last year, according to data released by benefits consultants Hewitt Associates, which tracks HMO premium rate information for 140 large employers.

The data also found that the percentage of employers with a $15 copay for physician visits increased from 24% to 43% from 2002 to 2003 and that the percentage with a $15 copay for specialist visits increased from 25% to 40%. Many employers also have asked employees to pay higher copays for prescription drugs, and more employers have begun to participate in three-tiered prescription drug benefit plans, according to the data.

In addition, the data found that 55% of the employers have a $50 copay for emergency room visits. However, the data found "a slight easing in premium increases from previous years."

A Hewitt study conducted at this time last year found that HMO costs would likely increase 21%. Ken Sperling, East market leader for the Hewitt Health Management Practice, said, "The [slowing] in HMO [rate increases] reflects the fact that health plans have made an adjustment to make up for conservative pricing last year, hospital costs are slowing, and while drug utilization is still high, greater use of over-the-counter and generic alternatives have impacted drug prices."