Competition and efforts to give consumers financial incentives to hold down health care costs may be starting to put the brakes on health coverage renewal rates.[@@]
Preliminary results from a U.S. group health insurance renewal rate survey organized by Milliman Inc., Seattle, suggest that 2006 rate increases may average 10.6%.
If that 10.6% figure holds, 2006 will be the sixth straight year of double-digit health rate increases, according to Steve Cigich, a Milliman consulting actuary who helped write the survey report.
But the projected 2006 figure is down from the 11.2% increase projected for 2005, and it is the lowest increase forecast Milliman has published in 6 years.
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Preliminary results for preferred provider organizations show that the projected 2006 increase will be 11.7%, down from a 12.7% increase projected for 2005.
An aging population, medical malpractice litigation costs, and rising rates of conditions such as obesity and asthma are some of the factors contributing to the continuing increases in health coverage rates, Cigich says.
But Cigich says he expects the final survey results, which will appear in October, will show that many employers will be shifting to “consumer-driven” health plan programs, or programs that combine high-deductible health coverage with various combinations of personal health accounts and personal health information.
Benefits experts in the Washington office of PricewaterhouseCoopers L.L.P. recently surveyed financial executives at 150 large and midsize U.S. employers.