Survey Points to Group Health Insurance Rate Hikes in 2011
Actuarial firm's preliminary results indicate highest premium increases in recent years.
Group health insurance premiums will spike in 2011, according to preliminary research findings published Aug. 2 by actuarial and consulting firm Milliman. Early results from Milliman's 2010 Group Health Insurance Survey indicate premium rate increases will continue to exceed the government's official rate of inflation and will be higher than premium increases in recent years. The company estimates January 2011 renewal increases at about 9 percent for health maintenance organizations (HMOs) and 11 percent for preferred provider organizations (PPOs).
Milliman sent the survey to U.S. HMOs and fully insured PPOs that serve the commercial, large and mid-group employer market. About 40 percent of all eligible insurers typically participate, the company said. Milliman will continue collecting data for the survey through the summer and will publish a complete report in October. The 2010 edition will mark the seventeenth time Milliman has conducted the survey.
The survey asks HMOs and PPOs to respond regarding a given set of group health benefits and demographics.
Doug Proebsting, co-author of the report, commented, "It appears that group premium rates are likely to increase at a higher rate in 2011 than what we have seen in recent years...[W]e can point to several potential contributing factors, including the possibility that the economy and employment worries are influencing utilization. There is also the question of how reform is affecting insurance rates."
Proebsting also noted in a recent paper that the expansion of Medicaid combined with an increase in Medicare-eligible members may cause health care providers to shift costs to the commercial market.
The October report will include premium rates and trends for medical and prescription drugs. Milliman will also report hospital inpatient cost and utilization data, physician reimbursement levels, medical expense ratios and profit levels. Results will be provided by metropolitan area, state, region and nationwide. Results for HMOs and PPOs will be shown separately. The survey will also include information on prescription drug claim costs, implications of health care reform and the implementation of ICD-10 codes.