Like their small-business counterparts, large employers say their premiums for healthcare insurance coverage will increase 7% for 1999, with steeper increases expected in 2000, according to an annual Towers Perrin cost survey.
The projected increases are the highest since 1994, when costs went up 6%, according to Towers Perrin, a management consulting company in Chicago.
Premiums for HMOs will increase an average of 8%-identical to the jump for costlier indemnity coverage, the study concluded. Premiums for PPOs and point-of-service plans will increase 4% and 5%, respectively.
Towers officials attributed the increases to sharply higher pharmaceutical costs, pressure on managed-care plans to either recoup losses or rebuild profits and an aging population.
The 213 large employers surveyed by Towers Perrin do not expect any improvement. For 2000, respondents said they expect cost increases of 8% to 10%.