December 9, 2002
FROM NEWS SERVICES
New York — The average health coverage premium for U.S. employees rose 14.7 percent in 2002, the largest one-year increase since 1990, according to a national study.
Health insurance costs were $5,646 per employee, compared with $4,924 in 2001, according to the survey by Mercer Human Resource Consulting, based in New York. Annual insurance premiums have risen an average 7.5 percent per employee since 1990, when they rose 17.1 percent.
To limit costs, companies have been cutting back on the plans they offer and how many employees they cover, the study said. Companies with at least 500 employees were more likely than smaller businesses to trim expensive health-management organization offerings, said study author Blaine Bos.
“Everything larger companies did created disruptions for their employees,” Bos said. “[Employees] had to pay more out of pocket, and many were faced with losing the options they had elected.”
About one-quarter of 2,900 employers surveyed said workers will pay a larger share of health plan costs in 2003.
“The costs are going up, and employers can’t afford it,” said Stephen Harri, managing director of Aon Healthcare.
Health care costs have been on the rise for the past several years due to a combination of events. The public’s dislike of restrictive managed-care plans has forced health insurers to widen access to doctors and hospitals, which are charging higher fees.
Drug prices continue to surge, and new medical technologies are available for conditions once considered untreatable.