DAILY MAIL BUSINESS EDITOR
Double-digit increases in health care costs for employers - andemployees - are expected in 2002.
A survey of more than 2,800 employers by William M. Mercer Inc.,a human resource consulting firm, found that employers expect theirhealth care costs to rise almost 13 percent next year. A survey oflarge employers by Towers Perrin estimates health care costs will goup about 14 percent on average.
West Virginia's largest insurers attribute the increases tohigher drug costs, the medical malpractice problem and an aging,sedentary population.
'Health care costs are rising for everybody, but it sometimeshits the smaller employer - the market with fewer than 50 people -disproportionately,' said Frank Baer III, president, chairman andchief executive officer of Commercial Insurance Services.
Baer said small groups have less bargaining power than largecorporations. He said that in addition to raising premiums, somecompanies are reducing benefits and shifting costs by requiringworkers to make higher co-payments.
Carl Callison, director of communications for Mountain State BlueCross Blue Shield, said the average health insurance premium forgroups from two to 50 people increased 16 percent in 2001, while theaverage premium for larger groups increased 17 percent. Callisonsaid rates are expected to increase by about the same amount nextyear.
Medical costs are increasing about 12 percent annually while drugcosts are increasing as much as 22 percent, Callison said.
Mountain State Blue Cross Blue Shield insures more than 250,000West Virginians. It is the largest private health insurance companyin West Virginia.
Dave Mathieu, vice president of marketing for the Health Plan ofthe Upper Ohio Valley, said the average commercial group premiumrose 11.2 percent in 2001. Employer groups with plans renewing inJanuary and February of 2002 have already been notified of premiumincreases averaging 21.5 percent, he said.
Mathieu said that because of the medical malpractice-liabilityproblem, 'we see physicians practicing more and more defensivemedicine. They're ordering more lab tests, more radiological tests.A lot of it, I think, is they're worrying about a potential lawsuittwo or three years down the road and if they haven't crossed every't' and dotted every 'i' they could be dealt a pretty severe blow inthe court system.
'One of the problems we have in the Northern Panhandle is we haveno neurosurgeons,' Mathieu said. 'So any head injury case is nottreated locally. People are often Lifeflighted to Pittsburgh orMorgantown. The helicopter alone is $10,000, not to mention thecharges we have to pay at some specialty facilities. Some patientsland in a facility where we have a contract but some don't.
'Some things we could once treat in the Wheeling area for $2,000now cost $20,000. It doesn't take a whole lot of those to add upquickly.'
The aging, sedentary population is also a factor, Mathieu said.
'The people we insure every year are getting older andunhealthier. We don't have an influx of younger people - it's asteadily aging population.'
The Health Plan of the Upper Ohio Valley has 74,000 HealthMaintenance Organization members and serves another 25,000 peoplethrough its third-party administrative division.
The Dow Chemical Co. has a self-insured health plan. The employee-only premium is going up 19.2 percent, from the current $36.07 amonth to $43 in 2002, while the employee-with-family premium isgoing up 16 percent, from $104.22 to $121 a month, said Geof Kusch,Dow's director of global benefits.
Medical insurance premiums at Charleston Newspapers will go up 15percent effective Jan. 4. Charleston Newspapers runs the businessoperations of the Daily Mail and the Charleston Gazette.
Writer George Hohmann can be reached at 348-4836 or by e-mail atbusiness@dailymail.com.
