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Milliman Survey Indicates Lower Health Insurance Rate Increases

SEATTLE, July 30 /PRNewswire/ -- Preliminary results from Milliman's 2008 Group Health Insurance Survey indicate premium rate increases continue to exceed the government's official rate of inflation but are lower than premium increases in recent years. The 2009 estimated January renewal increases of 8.5% for Health Maintenance Organizations (HMOs) and 9.4% for Preferred Provider Organizations (PPOs) continue a trend toward lower increases since peaking at 16.1% in 2002. This marks the sixteenth year that Milliman has conducted the survey.

The Milliman survey is unique in that it asks HMOs and PPOs to respond regarding a given set of benefits and demographics. The survey removes three important factors that can skew the results of other health cost surveys: differences in benefit design, cost sharing levels and member demographics.

Doug Proebsting, co-author of the report, notes that "Possible contributing factors to the rise in healthcare costs beyond the average rate of inflation (excluding aging and benefits) include increasing consumer demand due to direct to the consumer marketing and the availability of medical information on the internet. Rising rates of chronic conditions (like obesity, diabetes and asthma), new technology, specialty drugs, a move away from traditional managed care (such as preauthorization and closed network products), cost shifting impact from government healthcare programs and the uninsured, and the recent surge in building new hospitals also may contribute to the rise." On the other hand, Proebsting noted, "Potential factors contributing to the deceleration in recent rate increases include added consumer cost awareness as evidenced by higher use of generic drugs, lower utilization within HSA high deductible plans, and an economic downturn that may leave less money available for discretionary care for some people."

The survey was sent to the nation's HMOs and fully insured PPOs that serve the commercial, large and mid-group employer market. These results are preliminary; Milliman will continue collecting data for the 2008 Group Health Insurance Survey through the summer months. About 40% of all eligible insurers typically participate. Final results will be published in October.

The October report will include premium rates and trends for medical and prescription drugs. Milliman will also report hospital inpatient cost and utilization data, physician reimbursement levels, medical expense ratios and profit levels. Results will be provided by metropolitan area, state, region and nationwide. Results for HMOs and PPOs will be shown separately. The survey will also include information on prescription drug claim costs, premium differences due to deductible levels, growth in consumer-driven healthcare, broker commissions, and the implementation of ICD-10 codes.

Milliman is among the world's largest independent actuarial and consulting firms. Founded in Seattle in 1947 as Milliman & Robertson, the company currently has 48 offices in key locations worldwide. Milliman employs over two thousand people, with a professional staff of more than a thousand qualified consultants and actuaries, including specialists ranging from clinicians to economists. The firm has consulting practices in healthcare, employee benefits, property & casualty insurance, life insurance and financial services. Milliman serves the full spectrum of business, financial,

government, union, education and nonprofit organizations. For further information, visit


Doug Proebsting

Christopher Wanta


(262) 784-2250

Jim Loughman


(203) 698-0008

SOURCE Milliman
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