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Brokers Say Group Health Rates Rising for 2011
More adoption of consumer-driven, high-deductible plans in all segments

By Stephen Miller  6/7/2010

With health care reform now the law, health plan renewal rates for 2011 are increasing significantly, a survey of U.S. benefit brokers reveals. As a result, employers are looking for ways to cut the cost of group medical benefits.

According to the Council of Insurance Agents & BrokersEmployee Benefits Market Survey released in June 2010, small, medium and large employers continue to experience group medical coverage rate increases and are shifting some costs to employees through higher deductibles and co-pays and increased employee shares of premium costs.

“Several members commented that they are seeing large increases,” said council President Ken A. Crerar, noting that “brokers have some uncertainty about business going forward, but most believe there will be new demand for their services.”

Rate Increase Estimates

Among surveyed benefits brokers, the survey found that:

86 percent said prices increased for small accounts, those with 50 or fewer employees, with more than half the increases in the 11-20 percent range.

For medium accounts—those with 51 to 500 employees—93 percent said those accounts experienced increases, with 58 percent seeing increases in the 6-15 percent range.

Group health premium raises also were reported among large accounts—those with more than 500 employees. Of those, 51 percent saw increases in the 6-15 percent range, with 25 percent in the 6-10 percent range and 16 percent in the 11-15 percent range.

In survey comments, some brokers cited a trend to greater flexibility among carriers, with one broker stating, “Carriers seem to negotiate more to try to keep market share.” But more often they cited high increases, particularly for medium accounts (51-500 employees).

Regional Differences

Increases of 11-15 percent were reported for 31 percent of medium accounts in the Northeast; 33 percent of medium accounts in the Southeast; 30 percent of medium accounts in the Midwest; 40 percent of medium accounts in the Pacific Northwest; and 36 percent of medium accounts in the Southwest.

“For large, medium and small groups, there are more plan design changes to lower premiums,” was a typical comment, and brokers noted more adoption of consumer-driven, high-deductible plans in all segments.

Additional data from the survey is tabulated on the council's web site, here (scroll down to tables).

Stephen Miller is an online editor/manager for SHRM.

Related Articles:

Employers Brace for Health Care Cost Increases, Remain Committed to Subsidizing Employee Coverage, SHRM Online Benefits Discipline, June 2010

Employers: Expanded Coverage Will Raise Health Care Costs, SHRM Online Benefits Discipline, May 2010

Health Reform's Coverage Requirements Expected to Drive Premiums Higher, SHRM Online Benefits Discipline, April 2010

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SHRM Online Health Care Reform web page

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