Increases in group health care costs are up from last year but remain much lower than those of a few years ago, research shows.
This year, group health care costs increased by an average of 6 percent, to $8,331 per employee, and are projected to rise next year by 6.4 percent, according to an analysis released Monday, September 22, by Hewitt Associates Inc. of Lincolnshire, Ill. (To read a report about a different projection for 2009, click here.) The analysis is based on information from more than 400 employers.
The 2008 average increase is up from a 5.3 percent increase in 2007, but is substantially lower than 2006’s average increase of 7.9 percent and the 9.2 percent hike in 2005.
By plan type, increases in traditional indemnity plan costs were the highest, rising by 10 percent this year to an average of $9,296 per employee. Health maintenance organization costs jumped 8 percent, averaging $8,442 per employee, while preferred provider organization costs rose by 4.8 percent, averaging $8,048 per employee. Point-of-service plan costs climbed 3.8 percent to $8,986.
As health care plan costs have risen, cost shifting to employees also has increased. For example, employees' total health plan costs—which include out-of-pocket expenses, such as deductibles and copayments, as well as premium contributions—averaged $3,513 per employee in 2008, up 9.9 percent from 2007.
Hewitt’s health care cost analysis can be viewed at the company’s Web site.
Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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