The average cost of providing health insurance to workers is expected to rise 9.9% in 2006, the second straight year of high-single-digit increases but still almost triple the rate of general inflation, according to a report by Hewitt Associates Lincolnshire, Ill.
Health insurance costs rose 9.2% in 2005, the lowest average increase since 7.8% in 1999. Premiums climbed 15.2% in 2002, 14.7% in 2003 and 12.3% in 2004. According to the report, based on data from 2,000 health insurers and 400 major employers, cost increases will average 9.5% for PPOs, 10% for HMOs and 10.5% for indemnity and point-of-service plans in 2006.
That translates to a total cost of $8,046 per employee, up from $7,323 in 2005 and $4,101 in 2000. Employees are expected to pick up 20% of costs in 2006, up from 19.7% this year and 16% in 2000.
"The rate of growth remains unsustainable and the magnitude of healthcare costs continues to be a major concern for employers' bottom lines and employees' wallets," the head of Hewitt's healthcare practice said in a news release.