U.S. Companies and Employees Continue to Struggle With Double-Digit Rate Increases
Hewitt Associates – Press Release
October 11, 2004
On average, Hewitt forecasts that companies will experience 2005 cost increases of 11.5 percent for health maintenance organization plans (HMOs), 10.5 percent for traditional indemnity plans, 11 percent for preferred provider organizations (PPOs) and 11.5 percent for point-of-service (POS) plans, with projected employee contribution increases of 15 percent across all plan types.
That means from 2004 to 2005, the average cost per person for major companies will increase from $6,519 to $7,269 for HMOs; $6,823 to $7,573 for PPOs; $7,192 to $8,019 for POS plans; and $6,793 to $7,506 for indemnity plans, according to Hewitt’s database of more than 2,000 health plans in 139 U.S. markets, including 300 major employers and more than 18 million health plan participants.
“While there are many different variables that factor into regional health care cost increases, one of the most powerful drivers is the level of consolidation in the market,” added (Hewitt’s national health care practice leader Jack) Bruner. “Plans and providers continue to merge in many cities, reducing the purchasing power and number of options available to employers.”
http://was4.hewitt.com/hewitt/resource/newsroom/pressrel/2004/10-11-04.htm
And…
Health costs to rise 11.3%, group says
By Kim Morris
Detroit Free Press
October 12, 2004
…costs are expected to increase between 8 and 12 percent in each of the next five years, said Jeff Nielson, senior benefits consultant in Hewitt Associates’ Detroit office.
http://www.freep.com/money/business/ebenes12e_20041012.htm
Comment:
According to Hewitt, market consolidation has reduced the impact of competitive pricing resulting in higher health plan premiums, and there is no relief in sight. Private marketplace plans continue to prove that they are not capable of controlling health care costs.
It’s time to replace our highly flawed, fragmented system of funding care with our own monopsonistic, single payer purchaser. That’s the only way that we are going to get the level of health care spending right, both for patients and for health care providers.