The opening murmurs in negotiations between health plans and large employers have been heard. Insurers are expected to seek an average 13.7 percent hike in premiums in 2005, according to a survey of 160 large employers by Hewitt Associates.
Again, that's an average, not a consensus. Different insurers will ask for different increases.
For instance, the largest increase, 21.1 percent, is being sought by Anthem, according to Hewitt. UnitedHealth Group, on the other hand, is seeking a 10.2-percent increase. Also mentioned: Aetna, at 21.1 percent, Cigna at 13.2 percent, and Health Net at 18.9 percent. Not-for-profit Blue Cross and Blue Shield plans are expected to seek a 12.2-percent increase, on average.
The predicted rate of increase at the same time last year was 17.7 percent, although the actual increase ended up averaging 12.7 percent after plan negotiations and other changes.
Some experts believe that the lower starting point this year might mean that premium increases could drop into the single digits after negotiations — the first time that's happened in five years. Predictions range from 6 percent to 9.5 percent.
It would be the second year in which premium increases were lower than the previous year. Ken Sperling, the director of the Hewitt survey, attributes the relatively small increase to health plans reaching comfortable profit margins.
As a result, insurers are willing to price closer to underlying medical costs, which Sperling says are increasing 9 percent to 10 percent this year, down from 12 percent last year.
The growing trend of businesses shifting costs to workers is also reflected in the predictions.
Workers are expected to become more cognizant of just what their choices cost the system.
"We expect companies to continue pursuing strategies that allow consumers to better manage their health and make smart choices about the health care services they consume," says Sperling.