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Where's the Beef? Despite Predictions, Premiums Advance Only 3.3 Percent

MANAGED CARE August 1998. © MediMedia USA
News and Commentary

Where's the Beef? Despite Predictions, Premiums Advance Only 3.3 Percent

MANAGED CARE August 1998. ©1998 Stezzi Communications

Maybe next year? Despite gloomy predictions of a return to double-digit premium increases and such highly publicized incidents as the CalPERS-Kaiser snit, health plan premiums have risen only 3.3 percent in the past 12 months, according to findings by KPMG Peat Marwick's compensation and benefits practice.

The consulting firm says two strong undercurrents have held premiums at bay: lower health care inflation, and the fact that the market is still price-sensitive. Premiums will rise if health plans abandon their fixation on price, as many believe is beginning to happen, and if plans give in to demands for coverage of costly new drugs.