Survey: Employee health benefit costs on the rise

   CHICAGO - (BUSINESS WIRE) - 4/28/2011 - The cost of claims in employer-sponsored health plans continues to increase, according to a recent trend survey by Wells Fargo Insurance Services. Although the rate is slightly lower than six months ago, the survey found overall claim cost will continue to increase in the low double-digits.
    “Our survey results show that employers continue to seek sophisticated ways to manage employee health risk, stretch their employee benefit dollars and minimize costs”
   With more than 60 insurance companies participating, the nationwide survey was conducted between February and March 2011. Reflecting claim activity over a six-month period, projected increases in the national average cost of claims include:
  • Health maintenance organizations (HMO) and point-of-sale plans (POS) - 9.6 percent increase
  • Preferred provider organizations (PPO) and consumer driven health plans (CDHP) - 10 percent increase
  • Exclusive provider organizations (EPO) – 10.6 percent increase
  • Indemnity plans – 11.1 percent increase
  • Prescription plans - 8.7 increase
   Dan Gowen, senior vice president of Wells Fargo Insurance Services, said the continued cost increase suggests employer premiums will rise at a similar rate, as insurance companies anticipate costs based on claim trends.
   “Our survey results show that employers continue to seek sophisticated ways to manage employee health risk, stretch their employee benefit dollars and minimize costs,” said Gowen. “That’s especially true as insurers expect higher claim costs as a result of market changes brought on by federal healthcare reform.”
   The survey found that, in addition to healthcare reform provisions, claim cost is influenced by increased use of healthcare services, aging U.S. population, improvements in medical technology and drug therapies, use of specialty drugs to treat complex diseases, changes in provider treatment patterns, and inflation. Finally, in comparison to the prior six months, the survey also showed dental and vision benefit products remain stable.
   Wells Fargo Insurance services has conducted this biannual survey since 2008. The company will open its next survey in late summer 2011.

Photo by Steve Rensberry (c) 2014