HMO costs – and copays – on the rise

Healthcare costs continue to climb, and employers are shifting more of the burden to their workers, according to new data from consulting firm Hewitt Associates, of Lincolnshire, Ill.

Preliminary HMO premiums for 2003 are up an average of 20 percent among 140 organizations tracked by Hewitt. The average HMO premium increased 15.3 percent in 2002.

"Companies cannot afford these increases," says Mindy Kairey, e-business leader for Hewitt's Health Management Practice. "Consumers should expect to pay a lot more for healthcare."

Patients can expect to dig deeper for office visits, too. The number of companies offering plans with a $15 co-pay more than doubled, jumping from 11 percent in 2001 to 24 percent in 2002.

At the same time, employers offering $10 co-pays dropped from 64 percent to 58 percent. Employees are also being asked to pay more for prescription drugs and specialty-care office visits.

Hewitt's data also indicates that, broadly speaking, employers are losing their negotiating leverage with health plans.

Small firms appear to be faring best: Plans with 50 enrollees or fewer received the lowest HMO increases in 2002.