HMO Costs and Cost Sharing Going up

June 4, 2002 ( - It's the same old story when it comes to HMO costs and companies' scrambling to pay them.

According to a new Hewitt Associates survey, preliminary 2003 HMO rates are averaging more than a 20% increase and companies are increasingly turning workers to share more of those costs.

Hewitt said that data, from its Hewitt Health Resource Web site, which captures HMO rate information from almost 140 employers covering more than one million employees, shows that 2003 HMO rate hikes are averaging around 22% – compared to 15.3% for 2002.

However, for some the 2003 rate hikes could be as high as a whopping 94%, according to Hewitt.

As many have in the past when faced with oppressive health-care cost hikes, companies are turning to their employees with their hands out. For example, the number of companies with a $15 office co-pay more than doubled from 11% in 2001 to 24% in 2002, Hewitt said.

At the same time, employers offering $10 co-pays dropped from 64% in 2001 to 58% in 2002. Employees are also being asked to pay more for prescription drugs.

Specialty care office visit co-pays have increased too,

  • with 52% of companies using a $10 co-pay, up from 49% in 2000, and
  • 25% charging a $15 co-pay, up from 13% in 2001

Six out of ten companies have a $50 co-pay charge for emergency room visits, while 14% use a co-pay that is higher than $50, doubling from 7% in 2001.

Hewitt’s data also indicated that employers are losing their negotiation leverage with health plans. Plans with 50 enrollees or fewer received the lowest HMO increases in 2002 with an average of 12.8%, while plans with more than 501 enrollees had 15.9%-rate hikes.