Hewitt Predicts 13% Increase In 2004 Health Care Costs

By Allison Bell

October 13, 2003 at 08:00 PM

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NU Online News Service, Oct. 13, 2003, 6:23 p.m. EDT – U.S. employers probably will pay an average of 13% more for health coverage in 2004 than they are paying this year, 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 12%, to $7,056 per covered employee. The cost of the second most popular option, the health maintenance organization, will increase 13%, to $6,831, and the cost of traditional indemnity coverage will increase 12%, to $7,581.

The average employee contribution will increase 23%, to $1,565, Hewitt predicts.

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

Rates have been skyrocketing since 1997. This year, the cost of health coverage has increased 14.7%, to an average of $6,227 per employee.

But Jack Bruner, the Hewitt health care practice leader, says health care cost increases may be slowing down. "We are seeing some moderation in hospital cost increases and stabilization of prescription drug costs," Bruner says.

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