Preliminary results released today from Milliman´s 2006 Group Health Insurance Survey indicate the lowest rate increase in seven years. This is the fourth year in a row in which the rate of increase has declined. The 2007 estimated January renewal increase of 9.7% for Health Maintenance Organizations (HMOs) is 0.9% lower than last year´s survey result of 10.6%, and down 7% from four years ago. Preliminary results for Preferred Provider Organizations (PPOs) show an anticipated 2007 renewal rate increase of 10.7%, or 1.0% lower than last year but 1.0% higher than HMOs.
There are many possible contributing factors to the rise in healthcare costs, including an aging population, increasing consumer demand, rising rates of conditions like obesity, diabetes and asthma, new technology and specialty drugs, high medical malpractice litigation cost, healthcare workforce shortages, a move away from "true" managed care, cost shifting impact from government healthcare programs, cost of HIPAA compliance, and changing consumer attitudes toward healthcare.
"Look for the 2006 survey to report a continuing shift to CDH products," predicts Doug Proebsting, co-author of this year´s survey. The 2005 survey reported insurers were offering products with high deductibles and employee accounts in nearly all of their employer markets. "As costs escalate, employers, through education, cost sharing and spending accounts, are looking to engage employees to help reduce costs," Proebsting added.
Milliman, whose corporate offices are in Seattle, has consulting practices in healthcare, property & casualty insurance, employee benefits and life insurance/financial services.