Copyright© 2001 by School Services of California, Inc.

Volume 14                   For Publication Date: December 21, 2001             No. 26

Health and Dental Insurance Premiums to Increase in 2002-03

Industry analysts are predicting another year of double-digit increases to health insurance. Dental insurance, while not in double-digits, will experience an increase above the current rate of inflation. The estimated average health insurance premium cost increase is 13% to 14% in 2002-03, and some companies are predicting increases as high as 30% during the same time frame. The breakdown of the anticipated increase in different types of insurance plans is as follows:

• Indemnity 14.4%
• Preferred Provider Organization (PPO) 13.7%
• Point of Service (POS) 12.7%
• Health Maintenance Organization (HMO) 13.9%
• Prescription Drugs 17.0%
• Dental Insurance 6.0%

The basic causes of the continued rise in cost associated with health insurance include the rising costs in prescription drugs, increased HMO premiums, and fee increases by hospitals and physicians.

These estimated increases may make health benefits a major interest for all stakeholders when the negotiation process begins for 2001-02 and 2002-03. It is never too soon to begin collecting data from the Joint Powers Authority or Broker of Record regarding cost containment measures, benefit changes, co-pay or deductible options, and even provider/carrier switches. Our sources predict that this trend of double-digit increases in health insurance is likely to continue into the foreseeable future.

—Wes Stewart and Carol Berg