NU Online News Service, June 2, 11:13 a.m. EDT
Group medical benefit premiums continue to rise at double digit rates for the majority of accounts, and insurers tell brokers the reason is health care reform, according to a survey from The Council of Insurance Agents & Brokers.
The Spring 2011 survey of insurance broker members of The Council found that on renewals since November 2011 accounts of all sizes have seen increases in rates and few have experienced decreases or no change in rates.
For small accounts of 50 or fewer employees, 40 percent experienced rate increases of 11-15 percent while 22 percent saw rate increases higher than that at 16-20 percent. Thirteen percent saw their premium rise 1-10 percent.
Medium size accounts, between 51 to 500 employees, fared slightly better with 38 percent seeing rates rise 11-15 percent and 40 percent dealing with rate increases ranging from 1-10 percent. Fourteen percent saw their rates rise 16 percent or more.
Large accounts of 501 or more employees fared the best with only 14 percent seeing rates on renewal rise 11-15 percent and 7 percent experiencing rate increases higher than 16 percent. A total of 55 percent saw rates increase on renewal at 1-10 percent.
“Members continued to see premium increases for clients, though the rate of increase has slowed for some groups since our November survey,” says Ken A. Crerar, president of The Council in a statement. “Demand for brokers’ services continued to be high as employers continued to implement the changes from last year’s health care reform legislation. Nearly all accounts went through a renewal since the enactment of PPACA [Patient Protection and Affordable Care Act] a year ago, but there is still significant confusion among employers about implementing the law.”
The Council says anecdotal comments submitted by survey participants say some insurers blame the increases on PPACA and the cost is being passed onto policyholders.
Small accounts, according to participant commentary, suffer with lack of carrier flexibility on some accounts.
Employers are seeking ways to control cost, moving to consumer driven health care programs with higher deductibles combined with health savings accounts.
Of brokers responding to the survey, 43 percent say that between 10 and 30 percent of their clients “expressed an interest in moving all or part of their health benefits plan to this model,” The Council says.
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