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Milliman: 2003 HMO Rates To Climb 17%

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NU Online News Service, Oct. 3, 12:20 p.m. – U.S. health maintenance organizations will charge about 17% more for commercial HMO coverage in 2003 than they charged for comparable coverage this year, according to Milliman USA, Seattle, an actuarial consulting firm.

Researchers at the firm surveyed executives at more than 400 commercial HMO plans for the firm’s 2002 HMO Intercompany Rate Survey.

The results confirmed the double-digit HMO rate increase forecasts included with the 2001 survey report: the participants said their HMOs have raised 2002 commercial HMO rates 16% to 22%.

The cost of prescription drugs and the cost of in-patient hospital care appear to be stabilizing, but charges for hospital outpatient care, diagnostic testing and X-rays may now be responsible for driving up costs, Milliman says.

Projected 2003 increases for large groups range from 14% in the Mid-Atlantic region, which includes New Jersey, New York and Pennsylvania, to 21% in the West South Central region, which includes Arkansas, Louisiana, Oklahoma and Texas.