Employer health care costs will continue to spiral upward, according to a national survey of more than 90 health insurers, health maintenance organizations (HMOs) and third-party administrators conducted and released by Buck Consultants. According to the survey results, employers can expect cost increases of between 11 percent and 16 percent over the next year for traditional health care plans. The survey projects an average cost increase of 16.2 percent for typical indemnity health care plans, while projections for cost increases of other types of plans such as preferred provider organizations (PPOs) or HMOs were slightly lower but still averaged between 11 percent and 14 percent.

“Insurers continue to be concerned about the increased utilization of services, the health care cost shifting from Medicare and Medicaid, and difficulties in preserving favorable reimbursement rates with hospitals and doctors,” says Harvey Sobel, a principal and consulting actuary for Buck and a co-author of the study.

Sobel adds that all the jittery attitudes among insurance providers and the current cost increases did not even take into account the effects of Congress passing a patients’ bill of rights.

“Since insurers and HMOs are being very conservative and really want to play it safe, employers may wish to consider self-funding,” Sobel suggests.