Employer health costs rise only 3% for 1997

Although some health maintenance organizations have been forced to raise premiums to offset inadequate increases in the past two or three years, health costs for the nation’s largest employers will rise only about 3 percent for active employees this year, according to Towers Perrin, the benefits consulting firm. But these same employers said costs for retirees have gone up faster than for active employees: 4 percent for those under 65 and 7 percent for Medicare-eligible retirees. A Towers Perrin analyst ascribes “continuing moderate growth overall” to “the ongoing shift toward managed care delivery systems, intensifying competition between health plans” and “the low general inflation rate.”

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