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Friday, November 02, 2001

Health plan rate increases here top U.S.




By John Eckberg
The Cincinnati Enquirer

        Greater Cincinnati led the nation in health insurance rate increases this year at 15.8 percent, according to consulting firm Hewitt Associates.

        Hewitt, which has the largest benefit consulting business in the United States, projected another round of double-digit annual rate increases in the years to come. Tristate employers already expect increases of up to 20 percent for 2002.

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        Sharron DiMario, executive director of the Employer Health Care Alliance, said renegotiated contracts among hospitals, physicians and health plan organizations led to the increases.

        “I think that 2002 will be the first year that all those increased rates will take effect,” she said.

        The alliance represents about 1 million insured individuals who work for 60 companies based in the region, including Procter & Gamble, General Electric Aircraft Engines and Kroger.

        Lincolnshire, Ill.-based Hewitt said employees nationwide can expect to pay $186 to $463 more for individual health coverage in 2002. Last year employees on average paid between $955 and $1,194 for individual health coverage. The average health plan is projected to cost employers $5,524 per worker (including dependents) next year — up from $4,778 in 2001.

        Linda Ruth, health care consultant for Hewitt, suggested that competition from insurance providers kept costs low in recent years in Greater Cincinnati though rates are now playing catch-up. “There is a $5,300-per-employee cost in the region when that national average is $5,524,” Ms. Ruth said. “You've had two or three top health plans that were duking it out for a number of years for market share.

        “Now there is pressure to be profitable.”

       



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