Benefits August 15, 2001

Health Plan Industry Sees 2002 Costs Up 15%

August 15, 2001 (PLANSPONSOR.com) - The managed care industry expects premiums to shoot up 15% next year, a new survey reveals.
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The annual survey, published in the Managed Healthcare Market Report, finds that the projected increase is higher than the 11% to 12% hike pushed through in 2001. Texas, Florida, New Jersey, Ohio, Iowa and Alabama are expected to be hit particularly hard.

Among some of the large national and regional managed care plans,

  • Health Net has forecast a 16% increase in 2002 HMO premiums, 
  • Horizon Blue Cross Blue Shield of New Jersey sees them going up by between 15% and 20%, 
  • Oxford Health Plan predicts that it will be between 6% and 9%, 
  • Kaiser Permanente expects a 10% rise,
  • Blue Cross Blue Shield of Massachusetts sees an 8% to 14% rise, while
  • Blue Cross Blue Shield of Michigan puts the figure at 12%.

The key cost driver continues to be the 15% to 20% up-tick in the price of prescription drugs, further buoyed by an increase in medical care use, while higher provider reimbursements are also contributing to the increase.

The results are based on interviews with more than 75 major employers, coalitions, health plans and benefit consultants in 28 states.

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