Employers saw their healthcare premiums rise an average 10.5% in 2004, marking the fifth straight year of double-digit rate increases, according to a new survey of more than 1,000 U.S. companies. Although down from an average increase of 14% last year, the 2004 increase is still more than three times the rate of inflation, 3.3%. Premium increases of about 10% are expected in 2005, according to the study by the Hay Group, Philadelphia, a benefits consulting company. Premiums for PPOs rose 9% last year, compared with about a 14.8% climb in HMO rates, probably reflecting HMOs' decisions to ease coverage restrictions in response to consumer and government pressure. But a study by the Center for Studying Health System Change, released earlier this month, indicated that managed-care plans were reinstating some previous cost-containment measures. -- by Laura B. Benko
Employers report 10.5% premium increase in '04
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