The Council of Insurance Agents & Brokers reported in their "Spring 2007 Employee Benefits Market Index" that costs of medical insurance for most companies have climbed since last fall. The survey recorded responses from 90 agents and brokers from across the country.
More than half of small companies and nearly half of mid-size companies in the Midwest saw double-digit percentage increases in medical insurance premiums.
Midwest highlights include:
- 53 percent of small companies -- those with 50 or fewer employees -- had premium increases of 11-15 percent
- 20 percent of small companies had premium increases of 16-20 percent
- 47 percent of mid-size companies -- those with 51 to 500 employees -- had premium increases of 11-15 percent
- 47 percent of mid-size companies had premium increases of 6-10 percent
- No small or mid-size Midwest company saw premiums fall or stay the same
Of the large Midwest companies, 13 percent had double-digit increases with the majority of increases between 1-10 percent.
Nationally, 54 percent of small companies and 47 percent of mid-size companies had health insurances premiums increase 11-15 percent; 36 percent of mid-size companies saw premiums increase 6-10 percent.
A more complete analysis would include the medical loss ratio (MLR) and profit margins of the health insurance companies, the applicable regional consumer price indices (CPIs), and the profit margins (if any) for all of the various hospitals (potentially available for any heroic number-crunchers willing to sift through each hospital's Medicare Cost Report). Lacking that, the visceral instinct of BLOG Medicine is that these premium increases are going to fund insurance company overhead, their executive management's bloated and disproportionately lucrative compensation packages, and shareholders rather than pay for the sky-rocketing costs of covered services.
Hospitals and physicians are not blameless for spiraling-out-of-control healthcare costs, to be sure; however, year after year of double-digit premium increases have far out-paced inflation, wage increases, and the chargemaster caps that have become contractual "boiler-plate" for the majority of managed care companies.
Managed care was meant to be a vehicle for moderating health care costs. 34 years after the passing of the 1973 Health Maintenance Organization Act (PL 93-222), that vehicle has become a hit-and-run driver with no one at the wheel.■
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