Early results of two consulting firms’ health care insurance rate surveys forecast that 2007 will see lower premium increases than in recent years.
A preliminary survey by Milliman Inc., Seattle, estimates January renewal increases averaging 9.7% for health maintenance organizations, almost 1% lower than last year’s result of 10.6%.
Results for preferred provider organizations show an anticipated 2007 renewal rate increase of 10.7%, 1% lower than last year.
Meanwhile, preliminary information from Hewitt Associates, Lincolnshire, Ill., a human resources services company, shows 2007 HMO rates will rise about 11.7%, compared with 12.4% in 2006 and 13.7% for 2005.
After plan changes, negotiations and terminations, the final average HMO rate increased by 10% in 2006, according to Hewitt.
Both firms found 2007 would be the fourth year in a row in which the rate of increase declined, Milliman notes.
More will be known in October, when Milliman releases more comprehensive data on health care costs, says Doug Proebsting, co-author of the survey report. But despite the slower increases, they are still well above the nationwide rate of inflation, he points out.
“You have the ‘glass half empty, half full’ type of argument,” says Proebsting. “These percentages are unsustainable, because we are still two to three times inflation. We have to get back to a sustainable number.”
Milliman points to many contributing factors in the rise of health care costs, including an aging population; increasing consumer demand; rising rates of chronic conditions like obesity, diabetes and asthma; new technology and specialty drugs; health care work force shortages; and cost shifting due to government health care programs.