Academic journal article Health Care Financing Review

Survey Finds Largest HMO Rate Increase in Its History

Academic journal article Health Care Financing Review

Survey Finds Largest HMO Rate Increase in Its History

Article excerpt

Disappointing 1997-98 losses, a slowing of utilization improvements, and flat provider unit cost levels caused national health maintenance organization (HMO) premium rates to rise 8 to 10 percent over 1997 levels, according to the 1998 Milliman & Robertson, Inc. HMO Intercompany Rate Survey. It was the largest increase in the 7 years M&R has been compiling this data.

Following 4 years of flat HMO monthly book premium rates (the rates required to achieve budgeted revenue targets), the rate per member per month in 1998 increased to $138.30, a 7.8-percent rise from the 1997 rate of $128.28. On a per employee basis, that number was higher, posting an almost 100-percent increase from $151.01 in 1997 to $164.17 for 1998. The survey represents data as of July 1, 1998, based on responses from over 40 percent of all U.S. HMOs.

"HMO rates are still up 1 percent annually since 1994 even allowing for this year's spike," said Steve Cigich, the Milwaukee M&R principal who compiled the data in the survey. "Three factors contributed to this year's rise in rates: poor profitability, the inability of HMOs to obtain further unit cost reductions, and the inability of HMOs to further encourage providers and health care systems to provide care more efficiently. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.