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Hewitt: HMOs Ask For 17.7% Increases For 2004

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NU Online News Service, June 23, 2003, 12:47 p.m. EDT – Large U.S. employers are getting initial quotes for 2004 health maintenance organization coverage that are an average of 17.7% higher than 2003 rates, according to Hewitt Associates L.L.C., Lincolnshire, Ill.

The same employers reported in mid-2002 that carriers were asking for an average rate increase of 21% for 2003 HMO coverage, Hewitt says.

Negotiations and changes in plan design helped bring the actual average increase in 2003 HMO rates down to 17%, Hewitt reports.

The human resources consulting firm gets the rate data from large employers that use its Hewitt Health Resources health plan management Web site.

Although carriers are still asking for big rate hikes, moves to increase employees’ out-of-pocket costs and successful efforts to control hospital and prescription drug cost trends are helping to hold down HMO rates, Hewitt says.