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Benefits October 12, 2000
HMO Premiums Could Rise 9% Next Year
October 11, 2000 (PLANSPONSOR.com) - Employers could
be looking at an 8.8% hike in HMO medical care premiums next
year, according to the Sherlock Company's Sixth Annual HMO
Pricing Survey.
Reported by Nevin E. Adams
Health Maintenance Organizations (HMOs) nationwide are anticipating an 11.4% hike in premium rates and a 2% decrease in their medical loss ratios next year, according to the Sherlock survey.
In last year’s survey, HMOs expected a 10.6% increase in premium rates, compared to an 8.3% premium rate increase in 1999, a 4.6% premium rate increase in 1998 and a 2.6% increase in 1997.
However, in prior years, health plan expectations have been somewhat higher than the final results.
Location, Location
The regional average rate increases for 2001 ranged from 9.8% in the West South Central region to 16.1% in the Mountain region. The percentage point change in the medical loss ratio ranged from a 5.8% improvement in the Mountain region to a 0.3% improvement in the East North Central and Pacific regions.
Based on those expectations, inferred increases for per capita medical costs ranged from 6.5% in the East South Central region to 9.9% in the East North Central region.
The results were based on a survey of 553 HMOs, with a 16.8% response rate.