October 2001

Health Insurance Costs are Rising for Employers Across Industries

Across the country, health insurance premiums are surging at significant double-digit rates, a sign of rising medical inflation spurred by increased costs for pharmaceuticals, physician services and hospital care. Employers are seeing rate increases from 13 percent to 100 percent for 2002, and must share those costs with employees.

"This is a nationwide trend," said Renee Tehi, vice president of employee benefits for Catholic Health Initiatives. "Medical costs are up everywhere and in every industry. While our rates must cover claims expenses and the administrative cost of running the Catholic Health Initiatives medical plan, because the plan is self-funded our market-based organizations don’t have to contribute to a health maintenance organization’s or carrier’s profits. There’s no denying that costs are going up, but by bringing more market-based organizations into our self-funded plan we are at least removing the profit factor from our pricing."