North America

US group health rates exceed inflation

Premium rate increases for group health insurance continue to exceed the US government’s official rate of inflation but are lower than premium increases in recent years, a new survey has found. The survey by Seattle-based actuarial and consulting firm Milliman Inc estimates that January 2009 renewal increases will be 8.5% for health maintenance organisations (HMOs) and 9.4% for preferred provider organisations (PPOs), which will continue a trend toward lower increases since rates peaked at 16.1% in 2002. Milliman says its survey is unique in that it asks HMOs and PPOs to respond regarding a given set of benefits and demographics. The firm says that the survey removes three important factors that can skew the results of other health cost surveys: differences in benefit design, cost sharing levels and member demographics. The survey was sent to US HMOs and fully insured PPOs that serve the commercial, large and mid-group employer market.