• FREE RESOURCES
  • PREMIUM CONTENT
        • SEE MORE
          PREMIUM RESOURCES
  • HR DEEP DIVES
        • Coronavirus (COVID-19) Resources for HR Professionals
          Employment Law
          Labor Law Posting Requirements: Everything You Need to Know
          Recruiting
          businesswoman selecting future employees on digital interfaces
          Recruiting Resources for HR & Hiring Managers
          Performance Management
          vector image of young female making star rating
          Performance Review Resources
          Employment Law
          Understanding Equal Employment Opportunity and the EEOC
          Recruiting
          Onboarding Resources for HR & Hiring Managers
  • CORONAVIRUS & HR

  • LOGIN
  • SIGN UP FREE

HR Morning

  • FREE RESOURCES
  • PREMIUM CONTENT
        • SEE MORE
          PREMIUM RESOURCES
  • HR DEEP DIVES
        • Coronavirus (COVID-19) Resources for HR Professionals
          Employment Law
          Labor Law Posting Requirements: Everything You Need to Know
          Recruiting
          businesswoman selecting future employees on digital interfaces
          Recruiting Resources for HR & Hiring Managers
          Performance Management
          vector image of young female making star rating
          Performance Review Resources
          Employment Law
          Understanding Equal Employment Opportunity and the EEOC
          Recruiting
          Onboarding Resources for HR & Hiring Managers
  • CORONAVIRUS & HR
  • Employment Law
  • Benefits
  • Recruiting
  • Talent Management
  • Performance Management
  • HR Technology
  • More
    • Leadership & Strategy
    • Compensation
    • Staff Administration
    • Policy & Procedures
    • Wellness
    • Staff Departure
    • Employee Services
    • Work Location
    • HR Career & Self-Care
    • Health Care
    • Retirement Plans

Healthcare demand down, yet premiums still climbing

Christian Schappel
by Christian Schappel
May 31, 2011
2 minute read
  • SHARE ON

Does this sound right to you? The feds are reporting medical costs are growing at a slower rate than projected cost figures, which insurance companies use to set their rates. But the companies won’t scale back rate hikes.
The Department of Health and Human Services (HHS) just issued a statement, saying health insurance companies are reporting some of their highest profits in years.
One reason for these profits: Medical costs are growing slower than what insurance companies projected when they set their 2011 rates last year, according to the HHS.
The New York Times recently reported that UnitedHealth Group, a large commercial insurer, told analysts that insured hospital stays decreased in some instances last year. The report also claims that Cigna, another insurer, has talked about lower levels of medical care.
What’s causing the decline in use? Financial struggles are causing Americans to pinch pennies.
Many are postponing or skipping care to save as much as they can.
No breaks from insurers
Despite the fact big insurance companies don’t appear to be shelling out as much in medical claims as projected, they aren’t cutting plan participants any breaks in premiums.
In fact, some large insurers are pushing for increases in the 20%-25% range.
Why aren’t rate increases leveling off?
Here are the justifications those in the industry are offering up:

  • Insurers expect demand for healthcare to go back up later this year.
  • They are raising premiums to cover the cost of healthcare reform’s early mandates — like insuring adult children up to age 26.
  • They are implementing double-digit increases before it becomes harder to do so under the HHS’ new rules governing rate increases that kick in this September.
  • They are gearing up to deal with the reform law’s more costly mandates that start going into effect in 2014 — like having to provide coverage to everyone, regardless of pre-existing conditions.

Forgive our cynicism, but we can’t help thinking they left one prime motivator off this list: profits.
Why do you think insurers haven’t taken their foot off the gas when it comes to premium increases? Share your opinions in the Reply box below.

Get the latest from HRMorning in your inbox PLUS immediately access 10 FREE HR guides.

I WANT MY FREE GUIDES

Keep Up To Date with the Latest HR News

With HRMorning arriving in your inbox, you will never miss critical stories on labor laws, benefits, retention and onboarding strategies.

Sign up for a free HRMorning membership and get our newsletter!
  • This field is for validation purposes and should be left unchanged.
HR Morning Logo
  • Facebook
  • Twitter
  • Linked In
  • ABOUT HRMORNING
  • ADVERTISE WITH US
  • WRITE FOR US
  • CONTACT
  • Employment Law
  • Benefits
  • Recruiting
  • Talent Management
  • HR Technology
  • Performance Management
  • Leadership & Strategy
  • Compensation & Payroll
  • Policy & Culture
  • Staff Administration
  • Wellness & Safety
  • Staff Departure
  • Employee Services
  • Work Location
  • HR Career & Self-Care

HRMorning, part of the SuccessFuel Network, provides the latest HR and employment law news for HR professionals in the trenches of small-to-medium-sized businesses. Rather than simply regurgitating the day’s headlines, HRMorning delivers actionable insights, helping HR execs understand what HR trends mean to their business.

Privacy Policy Terms of Service
Copyright © 2021 SuccessFuel

WELCOME BACK!

Enter your username and password below to log in

Forget Your Username or Password?

Reset Password

Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.

Log In

During your free trial, you can cancel at any time with a single click on your “Account” page.  It’s that easy.

Why do we need your credit card for a free trial?

We ask for your credit card to allow your subscription to continue should you decide to keep your membership beyond the free trial period.  This prevents any interruption of content access.

Your card will not be charged at any point during your 21 day free trial
and you may cancel at any time during your free trial.

preloader