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Milliman 2005 Group Health Insurance Survey Sees Growth in Consumer Driven Products

Posted on: Monday, 10 October 2005, 09:00 CDT

SEATTLE, Oct. 10 /PRNewswire/ -- Results from Milliman's fourteenth annual survey of Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) indicate a vast majority of those companies will offer a Consumer Driven Health (CDH) product within the next year. Milliman's analysis shows that 93% of those who responded to the CDH portion of the survey expect to offer employers a high deductible plan with an integrated employee account, i.e., Healthcare Reimbursement Account (HRA) or Health Savings Account (HSA).

"The majority of insurers have taken steps to prepare for consumer driven health. The still unanswered question remains; to what degree will employers and employees buy in," says Steve Cigich, author of the survey. Though available from insurers, few employers/employees have thus far chosen these products. Among respondents, CDH premium revenue will only be 2.5% of all commercial premium revenue in 2005. However, respondents expect this amount to double to 5.2% in 2006.

Milliman's annual survey was sent to the nation's HMOs and fully insured PPOs that serve the commercial large and mid-group employer market. About 40% of those surveyed participated. Final results from the Milliman 2005 Group Health Insurance Survey will be published late October 2005.

HMOs and PPOs offer a variety of CDH approaches. All CDH approaches surveyed showed an increase in popularity except self-selected networks and self-selected benefits. Approaches showing an increase in availability include high deductible plans, integrated employee accounts such as HRAs or HSAs, tiered provider networks, sharing price and quality information with members for physician and hospital services, and education regarding treatment options available to members.

The survey also found that 44% expect to offer a tiered provider network within the next year. Tiered provider networks often provide members with financial incentives to choose the most efficient providers with the hope of reducing costs while still maintaining high quality care. More than half of all respondents reported that they currently share or plan to share within the next year price and quality information with members for hospital and physician services.

Complete results for the Milliman 2005 Group Health Insurance Survey will be available in late October and will include premium rates and trends by component, 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. HMO and PPO results will be shown separately. This year's survey results will also include information regarding the implementation of consumer-driven approaches to healthcare and small group medical underwriting practices.

Milliman, whose corporate offices are in Seattle, serves the full spectrum of business, financial, government and union organizations. Founded in 1947 as Milliman & Robertson, the company has 32 offices in the United States as well as offices in Bermuda, Hong Kong, London, Madrid, Mexico City, Milan, Munich, Sao Paolo, Seoul, Tokyo, and Warsaw. Milliman employs approximately 1,850 people, including a professional staff of about 850 qualified consultants and actuaries. The firm has consulting practices in healthcare, property & casualty insurance, employee benefits, and life insurance/financial services. It is a founding member of Milliman Global, an international organization of consulting firms serving insurance, employee benefits, and healthcare clients worldwide. For further information, visit http://www.milliman.com/.

Milliman

CONTACT: Steve Cigich, +1-262-784-2250, or Jim Loughman,+1-203-698-0008, both of Milliman

Web site: http://www.milliman.com/

Source: PRNewswire

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