2012 Projections Anticipate Health Premium Hikes

In concordance with a report published two weeks ago declaring health insurance premiums on the rise, a new pricing survey from Sherlock Company, of 22 percent of plans across the nation anticipates premium rate increases of 8 percent in 2012. This figure is down two percentage points from the 10 percent increase projected for 2011.

After benefit buydowns, premium increases are expected to average 5.5 percent, which also compares favorably with last year’s expectations of 7 percent.

According to Sherlock, the area with the highest change in estimated employee contribution trend is the East South Central—consisting of Alabama, Kentucky, Mississippi, Tennessee—with an increase of 19.5 percent. The Pacific area was the lowest at 10.3 percent. On average the contribution is expected to increase by 14.3 percent next year.

Sherlock’s Seventeenth Annual Health Plan Pricing Survey reflects projections of health plans of about 30 million commercial members, including 73 plans or 22.1 percent of health plans nationwide.

Medical trend is expected to be 8.8 percent in 2011, compared with 10.6 percent expected in 2011. Accordingly, the health benefit ratio is expected to increase by 0.6 percentage points. The area with the highest expected medical trend was the West South Central area, which includes Arkansas, Louisiana, Oklahoma and Texas, at 10.5 percent.