HMO Premiums Could Rise 9% Next Year

October 11, 2000 ( - Employers could be looking at an 8.8% hike in HMO medical care premiums next year, according to the Sherlock Company's Sixth Annual HMO Pricing Survey.

Health Maintenance Organizations (HMOs) nationwide are anticipating an 11.4% hike in premium rates and a 2% decrease in their medical loss ratios next year, according to the Sherlock survey.

In last year’s survey, HMOs expected a 10.6% increase in premium rates, compared to an 8.3% premium rate increase in 1999, a 4.6% premium rate increase in 1998 and a 2.6% increase in 1997.  

However, in prior years, health plan expectations have been somewhat higher than the final results.

Location, Location

The regional average rate increases for 2001 ranged from 9.8% in the West South Central region to 16.1% in the Mountain region. The percentage point change in the medical loss ratio ranged from a 5.8% improvement in the Mountain region to a 0.3% improvement in the East North Central and Pacific regions.

Based on those expectations, inferred increases for per capita medical costs ranged from 6.5% in the East South Central region to 9.9% in the East North Central region.

The results were based on a survey of 553 HMOs, with a 16.8% response rate.