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PPO Rates Pull Ahead Of HMO Rates

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Group health renewal premiums may increase 8.4% for health maintenance organization plans in January 2009, and about 11% to 12% for preferred provider organization plans.

Millman Inc., Seattle, has based those figures on a survey of carriers that serve large and midsize U.S. employers.

The actual increase in rates between July 2007 and July 2008, assuming no changes in benefits for cost-sharing levels, was 9.7% for HMO plans and about 10% to 11% for PPO plans, Millman says.

Switching to a $1,000 deductible from a $250 deductible cut premiums by an average of 12% in 2008, and switching to a $2,000 deductible cut premiums by an average of 20%, Milliman says.

Milliman also found that participating carriers’ account-based health plans, including health savings account and health reimbursement arrangement program plans, will be generating about 6% of the carriers’ premium revenue in 2009.