HMO premiums will drop an average of 1.2% in 1995-a first in this decade-while enrollment has increased to a record-setting 50.5 million, according to a study released last week by the Group Health Association of America, which represents managed-care plans.
The average HMO will charge $1,740 a year for an individual and $4,704 for a family in 1995, a 1.2% drop from 1994. The decrease continues a trend of moderation in premium rates, which rose 5.6% in 1994, 8.1% in 1993 and 10.6% in 1992 (See chart).
According to GHAA President Karen Ignagni, the lower premiums are due in part to increased bargaining power HMOs have wielded as their enrollments have grown and to lower inflation in the overall medical sector.
"We have now reached a critical threshold where the rules in the healthcare arena have changed," said Jon Gabel, GHAA's director of research.
Nearly 51 million Americans-one-fifth of the population-are now enrolled in HMOs, up from 45.2 million at the end of 1993. The GHAA expects enrollment to reach 56 million by the end of 1995.
GHAA officials admitted that HMOs' growth has not gone unnoticed on Capitol Hill and in state capitols across the country. In the past year, many of the healthcare reform plans in Congress included versions of any-willing-provider laws that would require HMOs to accept providers from outside their networks. Managed-care plans argue that forcing them to open their networks to any provider takes away the plans' ability to control patients care and costs.