NCPA - National Center for Policy Analysis

Get Ready For Hikes In Health Insurance Rates

October 27, 1999

Experts are warning that health-insurance premiums are going up in 2000, after about five years of price stability. Premiums could increase by 5 percent to 10 percent -- with office visits up by $5.

Some employers are increasing their own premium contributions, while others are said to be cutting back on wage increases or other benefits.

Some workers in employer managed-care plans will fare better than others, according to reports.

  • Employees at high-tech companies may well fare best as their companies decide to absorb cost increases -- while those who work in retailing or hospitality will be in greater jeopardy.
  • Companies and workers will be hardest hit by rate increases in the Midwest, the South and New England.
  • Those who work for smaller companies will be more heavily impacted by the increases than those associated with large outfits -- which usually have more of a cushion.

Cost-containment pressures are leading some companies to try novel experiments. One involves providing less coverage for rank-and-file employees than for upper management. Also, some small companies are letting workers vote on which plan they want.

Or companies might decide to cover the cost of the least expensive plan and let workers who want deluxe plans pay the difference.

Source: Carol Gentry, "Your Health Insurance for 2000: The Squeeze Is On," Wall Street Journal, October 27, 1999.


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