Thrusday, January 07, 1999
Local health insurance cost increases vary widely
BY TIM BONFIELD
The Cincinnati Enquirer
Greater Cincinnati health insurers have raised prices in 1999, but the rates vary widely and do not seem sharply higher than price increases charged for 1997 and 1998.
Nationally, a survey of large employers conducted by the Towers Perrin consulting firm reported that health benefit costs would go up an average of 7 percent, the largest increase since 1993.
Locally, some big health plans are reporting average increases closer to 5 percent, while others are charging 7 to 10 percent. Individual employers are seeing increases ranging from less than 5 percent to more than 12 percent, depending on the employer's past health claims.
Health plan costs for 1999 grew 9.9 percent at Hamilton-based Mosler Inc., which employs more than 1,800 people to make electronic swipe card systems, alarms and safes.
“The increase was about what we expected. We had a worse-than-average claims year,” said Roger Sims, director of employee relations and benefits at Mosler and a board member of the Employer Health Care Alliance.
The increase for 1999 will mean higher payments for employees but it was not enough to send Mosler shopping for a new health plan, Mr. Sims said.
What concerns me is that I'm hearing a continuation of the same trend for 2000,” Mr. Sims said.
Employer concern about health-care costs is increasing, but still remains far from the high-level concern it was in 1993, said Roger Ruhl, a spokesman for the Greater Cincinnati Chamber of Commerce.
In 1993, 20 percent of chamber members listed health costs as one of their top two concerns. By 1996, only 5 percent of employers put a high priority on health costs.
In 1998, that figure climbed to 8.5 percent, Mr. Ruhl said.
Two of Cincinnati's largest health plans, Anthem Blue Cross & Blue Shield and ChoiceCare-Humana, reported 1999 increases averaging 4 to 5 percent. At United HealthCare, increases were 7 to 10 percent.
One big factor has been rising pharmacy costs.
“People want us to cover new things. It's part of our responsibility to recognize that many of these new agents are expensive drugs that work very well,” said Ken Hoverman, chief executive at United's Cincinnati office.
Another big factor: Health plans are raising prices to make up for losses caused by past price wars.
At Anthem, increases for 1999 are less than the increases from last year, when rates went up 8 to 11 percent for many customers.
“A lot of (insurers) are trying to do some price strengthening. We really feel like we're ahead of the curve,” said Jim Barone, Anthem's vice president of sales.
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