This year seems to be starting the same
way last year ended. We have anticipated, on average, the medical premiums
to rise about 1% per month, leaving many companies looking at another
increase in health-care costs. We can attribute much of this added cost to
three factors. First of all, many HMOs lost money last year and are tweaking the
underwriting this year. Secondly, we have seen a great increase in
prescription cost, most of which comes in the form of advertising. The promotion
of new medication contributes significantly to what the industry will
charge over the coming years. And lastly, we see an
increase in new legislation for insurance carriers in some states.
After piecing these items together, it is
easy to see why we expect an 8 to 12 percent increase in health-care
premiums. We have observed the escalation of health-care costs rise from $110 to $170 per
employee over the last 15 years. The question many of us
are asking is “When will this trend come to an end?”.
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