Sherlock: Health Premiums 12.8% Higher in 2004

October 23, 2003 ( - Even though the projection falls below 2003 figures, health plans are still projecting a double-digit increase next year.

Premium rate increases are expected to be 12.8% in 2004, below last year’s increase of 15.2%. However, for the first time since 1996, firms are reporting an increase in their expected health benefit ratios of 0.2% points, according to the Sherlock Company’s Ninth Annual Health Plan Pricing Survey.

Factoring in the benefits ratios, per member payments for medical care will experience a 13.1% increase next year. At the same time, the amount that employees will be contributing to their plans will go up 20.7%, nearly double the increase in employer contribution of 10.7% , after the effect of buy-downs. The average expected buy-down spread came in at 2.1% for 2004.

By region, health plans in the Northeast region are expecting the greatest health cost and price increases, both before and after the effects of buy-downs. East South Central health plans expect the greatest buy-down spread and increase in employee contribution.

More information about the survey is available though Douglas Sherlock at (215) 628-2289 or