In a recently published Lampkin & Co. Employee Benefit survey 92% of the companies responding had experience increases in their Health Insurance premiums. With 74% having rate increase of 10%, and higher while 48% experienced increases greater than 15% in 2001.
2002 has brought more of the same level of increase in Health insurance premium and the future forecast is not much better. Health premiums will continue to rise as the market begins to stabilize.
The rising premiums suggest that, managed care is no longer keeping medical costs down.
Insurers with manage care networks are now trying to make up for the several years in which rates were kept down at the expense of profits, to gain market share. In making up they have also now begin to become more conservative in their underwriting practice and focusing on booking quality business.
Benefits will also change as carriers become less liberal in the coverage they extend to their policyholder in an effort to head off the spiraling claims cost that they will be confronted with.
Even Insurers will have to brace themselves for increased cost from their reinsures.
Over the next few years’ employers will be challenged to develop creative ways of dealing with these increasing cost.
Recent consolidating in the industry will increase profits for insurers but will also weaken the ability of employers to bargain on rates.
Those bearing the brunt of the health premium increase will be small to midsize companies, which have little to no bargaining power with insurers.
Even companies that have been loyal to one insurer are now shopping their contracts on an annual basis.
While rates will continue to rise There are still ways that employers can save money by choosing different coverage, such as increasing deductibles or changing co-payments on physician visits and various services offered by the plan.
4 ways to save money on your health Insurance
- Hire a broker who knows the health insurance market.
- Have your broker compare your plan and rates at least every two years.
- Purchase an indemnity style plan were the employee share in more of the cost with higher co-insurance amounts.
- Promoting employee wellness through such methods as smoking cessation and weight loss programs, among others.
by Glenn S. Ferguson<.br>
Glenn S. Ferguson, FLMI, HIA, founded Comprehensive Insurance Agents & Brokers & Comprehensive Consulting to assists both large, multi-national corporations, as well as smaller family owned businesses with their benefit decision-making.
Glenn has been helping individuals and businesses in the Bahamas with their insurance needs for the last 18 years.
He is a Fellow, Life Management Institute (FLMI); Associate of The Health Insurance Association of America (HIA) and a licensed insurance broker.
