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Medical premiums up about 10 percent
One survey found an increase of 10.5 percent, a rate not seen since 2004. Another estimate is 9.5 percent.
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Premium increases for health insurance appear headed toward double-digit territory, according to a new survey of Minnesota and Wisconsin employers.
Kansas-based Compdata Surveys reported that premiums jumped 10.5 percent this year, a significant increase if the pattern holds throughout the region.
Minnesota insurers do not have complete data for 2007, and the Compdata results are based on just 143 companies in the two states. But they could represent a trend.
"We're definitely in line with the Compdata survey," said Jan Hennings of Blue Cross and Blue Shield of Minnesota.
Greg Bury, a spokesman for Medica, the state's second largest insurer behind Blue Cross, said 10.5 percent "sounds about right."
Such an increase would be significant. Health insurance premiums grew slightly less than 7 percent in 2006 over 2005, the Minnesota Council of Health Plans reported earlier this year. The last time premium increases were at double digits was 2004 when they increased 10.5 percent.
But, the council report noted, health care spending increased by 12 percent last year and insurers posted their second consecutive year of operating losses. The figures in the Compdata report suggest the result of that disparity.
"It's a fact that health care costs and premiums are cyclical. If costs went up, you are likely to see an increase in premiums the following year," said Julie Bruner, executive director of the council. "Premiums are the price we pay for service."
David Delahanty, a benefits consultant at the Bloomington office of Watson Wyatt, said his organization is seeing premium increases in the neighborhood of 9.5 percent.
"We're seeing a lower trend number because the rates on prescription drugs are coming down as people use more generics. And we're seeing more high-deductible plans in which per-person costs tend to go down because utilization [of the health care system] slows down a bit," Delahanty said.
Insurers won't know 2008 trends in premiums until later this year. Official results for 2007 will be filed next April.
David Phelps • 612-673-7269 • dphelps@startribune.com
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