HMO premiums are continuing to rise at a double-digit pace, though somewhat slower than last year, a signal that rate hikes may be starting to moderate, according to preliminary data from benefits consultant Hewitt Associates. Employers nationwide are starting to negotiate HMO rates for 2004. Based on data from 140 employers representing more than 1 million employees, initial rates are averaging 17.7%, compared with 21% at the same time last year. But after plan changes, renegotiations and terminations, the average HMO rate hike in 2003 was 17%. "Overall, we anticipate HMO cost increases (in 2004) to end up in the low to mid teens for large organizations," as health plans adjust for conservative pricing last year, hospital costs continue to slow and more patients switch from brand-name drugs to generic alternatives, Hewitt management said in a statement.
Employers also are making plan design changes and sharing more of the cost with employees. The number of companies with a $15 copayment for doctor visits rose to 43% in 2003 from 24% in 2002. Meanwhile, 16% of employers now require a copay of more than $50 for emergency room visits, more than doubling from 7% in 2001. -- by Laura B. Benko