Milliman, Seattle, recently completed its 2010 Group Health Insurance Survey, which projects an average 10.2 percent premium rate increase for January 2011 renewals for health maintenance organizations and an 11.7 percent increase for preferred provider organizations. These increases also possibly reflect some change because of implementation requirements of the Patient Protection and Affordable Care Act.
For premium rates, the reported annual historical growth was 10.9 percent for HMOs and 11.7 percent to 12.0 percent for PPOs. The PPO results were collected for both a standard plan and a high-deductible plan. In 2009, commercial insurers saw a median 1.1 percent pretax profit as a percent of premium.
The Milliman survey requested a response from HMOs and PPOs based on a set of group health benefits and demographics. The survey eliminates three key issues that can distort the results outlined in other health cost surveys: modifications in plan design, shifts in premium sharing between the employer and employee, and member demographics. Thus, these trends indicate the rise in medical utilization and costs experienced and anticipated by the HMOs and PPOs.
Because of the PPACA, the 2010 survey also asked insurers what provider contracting changes and cost-saving initiatives are being considered. Typically, insurers plan to employ more quality incentive programs, initiate more shared risk with their provider networks, offer greater price transparency for members, more aggressively tier provider networks and cut broker commissions. Nearly all are preparing, they report, to participate in the 2014 PPACA insurance exchanges.
The 2010 report includes premium rates, trends for medical and prescription drug coverage, prescription drug costs, views toward recent health care reform legislation, and progress toward implementing ICD-10 coding per survey responses. Additionally, Milliman supplies hospital inpatient cost and utilization data, physician reimbursement levels, medical expense ratios and profit levels from Milliman's available databases. Results, which are shown separately for HMOs and PPOs when feasible, are provided by metropolitan area, state, region and nationwide.
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