NU Online News Service, Nov. 28, 1:37 p.m. EST

Eighteen months after passage of the Patient Protection and Affordable Care Act (PPACA), group medical benefits costs rose once again, according to a recent survey.

The November Council of Insurance Agents and Brokers survey also shows that the association's members remain apprehensive about the impact of healthcare reform, although the latest survey reveals some moderation in the intensity of concern compared to previous queries.

The latest survey demonstrates that all employer groups—small, medium and large—faced significant price hikes for group health care coverage during the past six months.

The survey finds that the largest accounts—groups with more than 500 employees—benefitted most from the new law.

Fourteen percent of these accounts experienced either no change or price decreases compared to 5 percent in the Council's May 2011 survey. For the majority (61 percent) of large accounts, prices rose in the range of 1-10 percent. Prices rose more than 10 percent for 9 percent of large accounts, compared to 21 percent in the May survey.

A greater percentage of smaller accounts saw the largest rate hikes, with 39 percent of small groups with 50 or fewer employees receiving increases of 11-20 percent. The figure is down from 62 percent reporting increases in that range in the Council's May survey.

More than one-third (35 percent) of small groups received smaller increases ranging from 1-10 percent, compared to 13 percent in the earlier survey. Ten percent of small groups received no changes or price decreases compared to 3 percent in the earlier study.

Some medium-sized groups saw rate decreases, although most had rate increases, the Council survey says. For groups with 51-500 employees, 69 percent experienced hikes in the range of 6-15 percent, compared to 75 percent in the May survey.

Sixteen percent experienced increases of 1-5 percent, no change, or decreases, compared to 8 percent in the May 2011 survey.

“The market has begun to adjust to initial new requirements in healthcare reform, but some uncertainty may persist as additional aspects are phased in over the next several years,” says Ken Crerar, president and CEO of the Council.

Comments from brokers on group medical-plan pricing presented a nuanced picture with respects to adjustments underway in the wake of PPACA.

“As a whole, recent renewals have been lower than any other time I can remember,” one broker tells Council officials.

“The trend is lower; renewals more reasonable,” comments another broker.

A third says, “We have seen more competitive new-business rates coupled with lower renewals.”

Crerar says some brokers saw prices rise due to the impact of PPACA, but he notes that increases were tempered by continued interest in and movement toward consumer-driven health plans and wellness plans.

These plans typically have higher deductibles. “Interest in high-deductible (plans) is taking off,” says one broker in the survey.

“Deductibles and co-insurance continue to rise to keep the rates down,” another broker says.

Still another notes, “Carriers, especially trusts, seem to be more willing to come off of the original renewal position.

However, some brokers continue to see significant price increases. In terms of pricing, “All the normal stuff, up, up up,” a respondent writes.

“(Renewals) adding 2-3 percent for PPACA,” another broker comments.

Another emerging development, according to the survey, is that carriers and employers are offering fewer options since the law's enactment. “In the small-to-medium account range, we have noticed a tightening of the amount of plan options offered to groups,” one respondent writes.

Special Reports /

Group Medical Benefit Rates Still on Rise, but Increases Moderating

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