Employers Working With Insurers To Negotiate Lower Health Premium Rates
The Wall Street Journal Tuesday examines the "tougher negotiating stance" that employers have taken with health insurers this year, a practice that allowed them to obtain lower premium rates after "six years of ever-higher premium jumps." Health insurers requested an average 17.7% increase in premium rates when they submitted their 2004 proposals to employers this spring, but by August, the request had decreased to an average of 11.5%, according to a survey of 140 employers conducted by Hewitt Associates. Health insurance premium rates for employers increased by an average of 17% in 2003. "What is giving many employers leverage in winning lower premium increases is a moderation in medical cost growth" since late last year through higher employee copayments and deductibles, which have reduced the use of expensive prescription drugs and have discouraged elective hospital procedures, the Journal reports. However, the "trend isn't likely to translate into much benefit for consumers anytime soon" because most employers "continue to see their premiums rise at a double-digit pace, several times the rate of overall inflation and workers' earnings," according to the Journal (Fuhrmans, Wall Street Journal, 9/23).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.