Hewitt Forecasts Big Health Coverage Cost Increases

By Staff Writer

October 29, 2001 at 07:00 PM

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NU Online News Service, Oct. 29, 3:45 p.m. – U.S. employers will pay an average of 15% more for health coverage in 2002, according to Hewitt Associates L.L.C., Lincolnshire, Ill.

The benefits consulting firm estimates the average cost of the most popular type of commercial coverage, preferred provider organization coverage will increase 13%, to $5,463 per covered employee.

The cost of the second most popular option, the health maintenance organization, will increase 18%, to $5,336, and the cost of traditional indemnity coverage will increase 15%, to $6,817.

Hewitt bases the forecasts on figures from a database of more than 2,000 health plans in 139 communities.

Hewitt analysts note that 2002 will be be the fourth consecutive year of major coverage cost increases.

This year, the cost of health coverage has increased 10.2%, to an average of $4,778 per employee.

"Health care costs will continue to increase at a double-digit pace for the next few years unless there is a fundamental change in the way health care is delivered," warns Jack Bruner, a Hewitt health care consultant.

Some companies will absorb the 2002 rate hikes themselves, but Hewitt predicts others will pass at least 25% the increases on to employees.

That means the typical employee could be paying between $186 and $486 more for health coverage in 2002, Hewitt says.

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