June 2006

HMO costs on slower rise

Healthcare costs are going up again, but not as much as previous years — representing the fourth consecutive year of declining rate increases. As U.S. companies begin to negotiate HMO plan rates for 2007, data from Hewitt Health Resource (HHR) — a Web site that captures HMO rate information for nearly 160 large companies representing more than 1 million employees and annual premiums of nearly $4 billion — shows that initial 2007 HMO rate increases are averaging 11.7 percent compared with 12.4 percent in 2006 and 13.7 percent for 2005.

The final average increases for HMO coverage were 10 percent in 2006.

Source: Hewitt Associates, www.hewitt.com

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