CIAB Survey Shows Continual Hike in Group Medical Insurance Premiums |
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Written by U.S. Insurance News
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Monday, 17 November 2003 |
According to the Fall 2003 Employee Benefits Market Survey done by The Council of Insurance Agents & Brokers (CIAB), premiums for group medical insurance have continued to rise over the last six months. Half of all small businesses and two-thirds of medium and large businesses reported that they experienced premium increases of 10 to 20 percent.
According to the Fall 2003 Employee Benefits Market Survey done by The Council of Insurance Agents & Brokers (CIAB), premiums for group medical insurance have continued to rise over the last six months. Half of all small businesses and two-thirds of medium and large businesses reported that they experienced premium increases of 10 to 20 percent.
The survey also showed that 30 percent of small and 11 percent of medium-sized businesses experienced even higher group health insurance premium increases of 20 to 30 percent in the Spring. For large accounts representing firms with 501 or more employees, however, premiums rarely increased more than 20 percent.
Brokers responding to the survey said 50 percent of their small accounts, businesses with 50 or fewer employees, experienced premium increases of 10 to 20 percent. Sixty-seven percent of medium-sized accounts, businesses with 51 to 500 employees, were in the same range. Nearly half the respondents do not write business for large accounts, but for those who do, 64 percent reported increases in the 10-20 percent range, and an additional 22 percent reported premium increases of 1-10 percent.
According to the survey, employers facing rising premiums were more likely to change their plan design rather than eliminate group medical coverage all together. Discontinuing coverage or implementing a consumer-driven, defined contribution health plan were the two least popular cost-control options reported by the insurance brokers who handle benefit business. Limiting out-of-network options and requiring up-front hospital and outpatient co-pays also were used rarely for cost-control.
"Most employers are reducing benefits but not eliminating benefits. Dental is the first to go on a few," said one broker from the Midwest.
The most frequently used options involved higher deductibles or co-pays for medical care, increased employee contributions toward their health-care coverage and implementing or increasing the prescription drug co-pay. About one-third of the respondents said higher deductibles and co-pays and increased employee contributions were being used by more than 70 percent of their clients to control costs, while nearly 40 percent said adjusting the prescription drug co-pay was the choice of the vast majority of their customers.
CIAB is the voice of the market leaders and the premier association for commercial insurance and employee benefits intermediaries in the U.S. and abroad. Headquartered in Washington, D.C., CIAB represents the largest, most productive, and most profitable of all commercial insurance agencies and brokerage firms. Only the top one percent of all agents and brokers qualify.
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