ST. PAUL (AP) -- Health plan officials are predicting double-digit increases in health care premiums for Minnesotans in 2003 -- for the fifth straight year.
Average premiums are expected to increase from about 12 percent to more than 20 percent next year, depending on the plan and the employee group. Because these are averages, some employees could see lower increases, and some could see even higher increases.
The state's largest insurer, Eagan-based Blue Cross and Blue Shield of Minnesota, expects premiums to jump between 12 percent and 16 percent for small groups and from 15 percent to 20 percent for large groups, said company spokesman Joel Swanson.
Premiums at Minnetonka-based Medica, the state's largest health maintenance organization, will climb 13 percent to 16 percent, said company spokesman Larry Bussey.
Average premium hikes at Bloomington-based HealthPartners will be up 12 percent to 15 percent, said Andrea Walsh, executive vice president.
Higher premiums reflect more expensive new drugs, new high-tech devices, new surgical procedures and new therapies that are enabling Minnesotans to live healthier and longer lives. Also, the companies said, more people are using more health care services, including behavioral health services, and costs of labor and malpractice insurance have increased.
At the same time, the federal government continues to cut Medicare and Medicaid reimbursement rates to doctors, clinics and hospitals, forcing them to shift growing piles of unpaid bills to patients with health care coverage.
Kirby Erickson, interim executive director of the Minnesota Council of Health Plans, points to the aging population as another reason for the increase in costs.
"It is so complex there is no silver bullet that can fix it," said Mary Boerjan, director of network actuarial for the Blues. "There is a lot of talk about consumer-directed products. It makes consumers more aware of the costs ... but it will not have a big impact on cost increases."
Bill Blazar, senior vice president of the Minnesota Chamber of Commerce, said employers are trying to hold down spiraling costs by encouraging employees to become better health care shoppers. Small employers, meanwhile, are forming large pools that enable them to save money on administrative expenses and, eventually, on underwriting.
In an attempt to slow premium increases, the Chamber of Commerce's Business Services group has teamed up with Medica to develop a new health care plan that financially rewards employers for conducting wellness programs and gives employees choices between a low-cost basic health care plan and step-up plans that cost more but provide more benefits.
"It's part of getting consumers engaged so that they have a bigger share in the cost" of health care, Blazar said.
"In the past, we just bought our way through the current crisis. Now we will spend some money, but at the same time we will make some fundamental changes that will make the system more affordable, not just for the next two years but for the next 10."
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