Managed Care


Negotiations for 2002 Could Yield 15 Percent Increase in Premiums

MANAGED CARE September 2001. © MediMedia USA
News and Commentary

Negotiations for 2002 Could Yield 15 Percent Increase in Premiums

MANAGED CARE September 2001. ©MediMedia USA

Sticker shock: Many purchasers are seeing proposed year-2002 premium increases near 20 percent. William M. Mercer says its clients have been served an average HMO-renewal rate of 18.5 percent, while HewittAssociates reports a 17.6 percent average increase.

This, of course, is before the bargaining begins; employers and insurers will settle somewhere around 14-15 percent, observers estimate. Still, that's well ahead of last year's average hikes of 10-12 percent. Expect employers to look hard at cost-sharing options and for plans to come up with creative ways to help them do that (see our cover story for this month).

Premium hikes have given the HMO industry some short-term profitability. Weiss Ratings says the 492 HMOs it studied made a collective $990 million in profits, compared with a cumulative 1997–99 loss of $1.8 billion from 1997 to 1999. While HMOs shed unprofitable lines of business and some 100 were shut down or merged out of existence from 1999 to 2000, Weiss remains concerned that a handful of companies are driving industry profits, and considers a third of HMOs vulnerable.


2014 Annual HEDIS® and Star Ratings Symposium Nashville, TN November 3–4, 2014
PCMH & Shared Savings ACO Leadership Summit Nashville, TN November 3–4, 2014
Medicare Risk Adjustment, Revenue Management, & Star Ratings Fort Lauderdale, FL November 12–14, 2014
World Orphan Drug Congress Europe 2014 Brussels, Belgium November 12–14, 2014
Healthcare Chief Medical Officer Forum Alexandria, VA November 13–14, 2014
Home Care Leadership Summit Atlanta, GA November 17–18, 2014
6th Semi-Annual Diagnostic Coverage and Reimbursement Conference Boston December 4–5, 2014
Customer Analytics & Engagement in Health Insurance Chicago December 4–5, 2014
Pharmaceutical and Biotech Clinical Quality Assurance Conference Alexandria, VA December 4–5, 2014
9th Semi-Annual Medical Device Coverage and Reimbursement Conference San Diego December 5, 2014
8th Annual Medical Device Clinical Trials Conference Chicago December 8–9, 2014
HealthIMPACT Southeast Tampa, FL January 23, 2015