Health benefit costs, down in '97, rising Insurance

January 20, 1998|By M. William Salganik | M. William Salganik,SUN STAFF

Health benefit costs in the Baltimore-Washington market dropped 2.3 percent last year, according to a survey of employers by William M. Mercer Inc., a benefits consulting firm.

However, the decline in cost already seems to be reversed, John Welch, a principal in Mercer's Washington office, said yesterday.

"Most managed care organizations had depressed earnings in 1997, or actually lost money," Mercer said, so they are raising premiums. Among clients in the Baltimore-Washington area renewing for 1998, he said, price increases are 3 percent to 8 percent, with most at 4 percent or 5 percent.

Nationally, the survey found a small increase -- 0.9 percent -- in cost per employee last year.

Welch said a major factor in the decline in the local market, and the nearly flat trend nationally, was a continuing shift of workers from old-style indemnity plans to health maintenance organizations and other managed care plans.

Nationally, the survey of nearly 4,000 employers found that enrollment in indemnity plans dropped from 23 percent in 1996 TTC to 15 percent last year. "Baltimore-Washington is darn near the high end of managed care enrollment," Welch said, with only 8 percent of workers here in indemnity plans.

Pub Date: 1/20/98

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