Health Insurance premiums rise

WASHINGTON, Nov. 23 /U.S. Newswire/ --



The cost of health insurance continued its upward climb for companies of all sizes, with more than half the smaller employers and two-thirds of the medium-size businesses finding their premiums 10 to 20 percent higher during the last six months than they were at the beginning of the year.

Large employers, those with 501 or more employees, also saw their health insurance premiums increasing, with 30 percent of the account premiums up by one to 10 percent, and 40 percent up by 10 to 20 percent over the first six months of 2004.

For small accounts, representing employers with 50 or fewer employees, 12 percent of premiums were up one to 10 percent; 55 percent were up 10 to 20 percent; and 13 percent were up 20 to 30 percent. For medium-sized accounts, with 51 to 500 employees, 19 percent of premiums were one to 10 percent higher; 64 percent were up 10 to 20 percent; and five percent were 20 to 30 percent higher.

According to the survey, less than 11 percent of employers who offer health insurance to their workers experienced flat rates or decreases in their premiums during the second half of the year, regardless of the size of company.

The findings were contained in The Council of Insurance Agents & Brokers' benefits survey, which is taken twice a year to track trends in benefit offerings and premium costs in the commercial insurance marketplace. The Council represents the nation's largest insurance brokers who annually write 80 percent of the commercial property/casualty premiums and administer billions of dollars of employee benefits accounts.

Benefits brokers responding to the survey said increasing employee contributions, assessing prescription drug co-pays and higher deductibles and co-pays for all services were the most common options their clients were choosing to control costs.

Although consumer driven health plans and various defined contribution plans are still relatively new options, the brokers responding to the survey indicated that there is a great deal of interest in them. The health savings accounts (HSAs) and health reimbursement accounts (HRAs) that President Bush has strongly supported are prompting insurers to begin preparing options for employers. Employers are showing interest in them, the respondents said, but they still have not gained much traction in the marketplace.