Health-care premiums projected to rise 11% in '07

10/5/2006

A survey by an employee benefits firm indicates that the costs for health care and prescription drug coverage will rise 11 percent next year nationally, although that increase is less than this year's.

"What surprised me in the beginning was the fact that over the last several years we have seen prescription drug trends running higher than medical," said Bruce Davis, a principal at Findley Davies Inc.

"To see them converge so rapidly, that was one of the most surprising aspects of the survey."

The company, which has offices in Toledo, Cleveland, and North Carolina, annually surveys health insurance underwriters to detect ongoing national industry trends.

The survey found medical coverage rates could rise by 8.8 percent to 15 percent and prescription drug coverage could go up by 7 percent to 20 percent. The combined costs are expected to be up 13 percent this year.

Rates vary locally depending on factors such as demographics, the level of health care, health care options, and accounting and billing practices.

Declining prescription-drug rates were credited to the use of generic drugs, the survey showed. This year patents expired for several widely prescribed drugs, like cholesterol-reducing Zocor, and less expensive generics appeared.

Lower-cost generics make patients more likely to take medicine regularly and prevent costly hospital visits, Mr. Davis said.

The survey also found plans promoting healthy lifestyles to contain medical and drug costs have been ineffective so far.

Dave Tippett, of the Employers' Association in Sylvania, said the results contain little to soothe employers and employees facing higher costs.

"You can't call a [rate] decrease a bad thing generally in the health-care realm. But because it's so 'slight,' in the eyes of the employee it might not seem like much of a cutback," he said.

The local trade group recently surveyed 222 of its members and found that three-quarters pay from 75 to 100 percent of an employee's health care premiums.

Approximately 94 percent offer employees a prescription drug plan.

Contact Jon Chavez at:

jchavez@theblade.com

or 419-724-6128.