When it Comes to Health Care Cost Increases, Location Matters

October 5, 2009 (PLANSPONSOR.com) - This year some major U.S. markets experienced health care rate increases significantly higher than the national average, according to a new report.

Hewitt Associates notes that among the areas experiencing higher than average increases were:

  • Orange County (9.6%)
  • San Diego (9.5%)
  • Los Angeles (8.7%)

“Workers in California saw higher health care increases this year mainly because more companies in the state offer fully insured HMOs, and increases for these plans have been higher than average,” said Bob Tate, Hewitt’s chief health actuary and the leader of the consulting giant’s annual cost study. Hewitt notes that in 2009 average health care premiums increased 6%, and anticipates a similar rate of increase in 2010 (see Employer Health Care Cost Increases to Remain Stable )

Those above-average increases weren’t limited to California, however. South Florida experienced an average increase of 8.2%, while Austin, Texas absorbed an 8.0% average increase.

“Below” Averages

On the other hand, there were areas that enjoyed increases that were significantly below the averages; in Columbus, Ohio the rate of increase was just 0.8%. Other notable locales:

  • Cincinnati (2.1% increase)
  • Nashville (3.3% increase)
  • Phoenix (3.8%)

Hewitt’s health care cost data is derived from the Hewitt Health Value Initiative, a cost and performance analysis database of more than 1,700 health plans throughout the U.S., including 325 employers representing more than 13 million health plan participants.