Group Medical Continues To Climb

Group medical rates continue their double-digit climb, a survey of the nation's largest insurance brokers shows, with most accounts seeing increases in the 11-to-15 percent range.

The Council of Insurance Agents & Brokers released its Spring 2006 Employee Benefits Market Survey of 105 insurance brokers, asking what accounts have experienced over the past six months in the areas of group medical and group life renewals.

The survey found that 45 percent of small accounts (50 or fewer employees) saw group medical rates increase 11-to-15 percent, while 46 percent of medium accounts (between 51 and 500 employees) and 30 percent of large accounts (501 or more employees), experienced the same increases.

Forty percent of large accounts sustained increases between 6 percent and 10 percent, while 34 percent of medium accounts and only 15 of small accounts saw the same percentage.

A number of small accounts–17 percent–saw even sharper increases of 16-to-20 percent, while only 8 percent of medium accounts and 2 percent of large accounts sustained these increases.

According to the CIAB, those surveyed said employers are trying to control their premium costs by shifting more costs onto employees.

Employers are also looking at higher deductibles and co-pays, higher out-of-pocket maximums and prescription drug coverage.

Sixty-eight percent of the responding brokers said they sold a high-deductible health plan along with health savings accounts for either 2006 or 2007.

If there was any good news, as far as group medical is concerned, it may be in the fact that the figures showed some moderation from the fall 2005 survey.

In the fall survey 67 percent of small accounts saw rates increase 10-to-20 percent, while 61 percent of medium accounts and 32 percent of large accounts saw the same increase.

The spring survey differs from the fall survey in that the figures, instead of appearing in increments of 10 percent, were broken down in increments of five. Adding the 11-to-15 percent and 16-to-20 percent increments together, 62 percent of small accounts saw group medical rates increase 11-to-20 percent, while 54 percent of medium accounts and 32 percent of large accounts (almost the same as in the fall survey) saw increases.

On the group life side, 54 percent of small accounts, 60 percent of medium accounts and 43 percent of large accounts saw no change in premium rates in the spring survey. Twenty-five percent of small accounts, 12 percent of medium and 8 percent of large accounts saw a 1-to-10 percent increase. Twelve percent of small accounts, 19 percent of medium accounts and 25 percent of large accounts experienced decreases between 10- and 20 percent.