- The Washington Times - Friday, July 6, 2007

Bad news for U.S. businesses and workers emerged last week as an analysis of projected health plan costs showed that premiums will increase 14 percent next year, the largest increase in four years.

The analysis by Hewitt Associates of nearly 160 large companies shows the initial premium rate increases for HMO health plans are averaging 14.1 percent compared with a premium increase of around 8 percent last year.

“A few carriers have proposed significantly higher rate increases for 2008, which seems to be the primary reason for the spikein this year’s overall rate increase across plans,” said Jeff Smith, a co-leader of Hewitt’s rate analysis project. “We expect that average rates will decrease once negotiations are complete; however, they may continue to be in the double digits.”

The Hewitt analysis may be an indication that the recent falloff in premium rates is about to come to a halt. According to a report done last year by the Kaiser Family Foundation, premiums for employee health care plans have slowed over the past several years but have continued to rise faster than inflation, which has been 3.5 percent annually for the last several years, and wages, which has increased 3.8 percent annually.

In other news:

Democratichealth care leaders in the House released a letter last week laying the groundwork for a Medicare bill that will be pushed this year.

The centerpiece of the legislation would reauthorize and boost funding for the State Children’s Health Program, or S-CHIP. But House lawmakers plan to include other Medicare reforms such as preventing payments to doctors from decreasing and boosting subsidies for low-income seniors in the Medicare program.

Chairmen of the relevant committees released the letter to all Democratic members in the House on June 28.

“The legislation will reverse the Republican drive to privatize Medicare. … With strong public support, we will present a bill the administration and vulnerable Republicans cannot afford to block,” said Democratic Reps. Charles Rangel, New York, chairman of the Ways and Means Committee; John Dingell, Michigan, chairman of the Committee on Energy and Commerce; Pete Stark, California, chairman of the Ways and Means subcommittee on health; and Frank Pallone, New Jersey, chairman of the Energy and Commerce subcommittee on health.

According to the letter, the House version of the S-CHIP bill will seek to expand the program to cover additional groups of children such as those who are too old for the program and Medicaid but who are continuing their education or no longer qualify for their parent’s insurance.

The White House, led by Health and Human Services Secretary Michael Leavitt, is rallying against an expansion of the S-CHIP program. Rather, the administration would like to add around $5 billion to the program in order to maintain current enrollment and seek to insure additional children through the private sector, via tax breaks.

Paying doctors through Medicare is an annual problem for lawmakers. The rub is the complex payment formula. Over the past several years doctors have been slated for reimbursement cuts for treating Medicare patients and this year doctors are in line for a whopping 10 percent payment cut. It seems that the House bill will try to remedy the formula.

c Health Care runs on Fridays. Contact Gregory Lopes at 202/636-4892 or glopes@washingtontimes.com.