9 to 15 percent for PPO/HMO plans; uncertainty remains

NORTH BAY – Health insurance premiums for business owners in 2011 will rise anywhere from 9 percent to 55 percent.

Chris Reiter of Woodruff Sawyer & Company said there will be an average increase of 9 percent to 15 percent year over year for traditional PPO/HMO plans.

“It is a little higher than in the past,” he said.  "But for high deductible or consumer-driven health plans, the increase will be anywhere from 20 to 55 percent."

The sharp increases in those plan premiums is causing some companies to reconsider.

"Some companies are switching out of these high-deductible plans because the costs have risen so much more in the last couple of years that the costs have come back into balance," he said.

He said over the past few years, many companies moved into the high-deductible plan to save money, but the rates have caught up to the HMO and PPO costs.

“We are seeing on the low end a 10 to 20 percent increase in premiums,” said Vic McKnight, a benefits consultant at Sitzmann Morris & Lavis in Santa Rosa.

“It is all over the board,” he said. “Somewhere between 2 and 5 percent is due to reform.”

Two other areas where business owners will be financially impacted are in preventive health care and dependents being covered up to age 26 regardless of student status.

Preventative health screenings are now to be covered 100 percent.

"For companies that pay dependent premiums, they are seeing an increase there, and they are not really happy about it," Mr. McKnight said.

He said that in a different economy, it would not be as high. But with many dependents coming out of school and not getting work, or working part time and going to school part time and not getting coverage of their own, many more people are impacted.

He said another problem is that the carriers are just now figuring out the pricing that had not been clear before.

Anne Willson from EPIC insurance in Petaluma said she has also seen a lot of movement toward Kaiser.

"Kaiser is leading the industry in medical records technology. They have all your info everywhere. They are doing a lot from a wellness perspective," she said.

Mr. McKnight said health care reform has also made it difficult to forecast what other changes may be ahead.

"The chance of repeal would be 2013," he said. "There will be pressure by Congress, and we will see battles in Congress over funding when the budget comes through.”