Health Care Costs Increase in 2007

Sixty-eight percent of companies had a health insurance premium increase, according to the preliminary results of the Compensation Data 2007 annual survey. When compared to 2006, this number has decreased from 72.4 percent. The 2007 survey results showed the average premium increase was 11.1 percent for all plan types.

While health insurance premiums are rising, they have been increasing at a lower rate. In 2006, the average premium increase was 11.6 percent and then, 12.4 percent the previous year. When comparing plans in 2007, 66.3 percent of organizations offering PPO plans saw an average increase of 11.2 percent, while HMO and POS plans had average premium increases of 11.1 and 10.5 percent respectively.

To contain rising costs, organizations are using a variety of methods. The most highly used is coordination of benefits at 68.5 percent in 2007, while wellness programs are utilized by 67.6 percent according to the results. Use of a network of health care professionals is prevalent, as 61.5 percent of organizations use it to contain costs.

The newly released results showed 35.4 percent of companies increased the employee portion of the premium in their efforts to reduce costs. This is 5.4 percent lower than it was in 2006. Currently, 28.5 and 15.8 percent of organizations increased deductible levels and employee co-insurance levels respectively. On average, employers contribute 10.5 percent of payroll toward the cost of health benefits, which is nearly the same cost to provide all of the following benefits: dental, pension, life, disability and other non-mandated benefits.

Health insurance continues to be a concern for both employers and employees across the United States, said Amy Kaminski, manager of marketing programs for Compdata Surveys. And as the presidential election approaches, candidatesí health care plans will remain a primary focus of debate. However, most companies are concerned with how to contain costs now, and in response, some states are exploring legislative measures.