Local News

HMOs Expected to Begin Raising Rates

Posted July 1, 1998

— Choosing an HMO over standard health insurance can reduce one's health care costs, but those financial savings may soon be a thing of the past. After years of relatively stable rates, and in fighting to gain more than 65 percent of the N.C. insurance market, HMOs are expected to start hiking premiums soon.

Those $10 co-payments for doctors visits could soon become medical history. Depending on how much HMOs hike rates and how employers pass along the extra costs, consumers will likely suffer the side effects.

"It's just, it's a shame to see that prices go up because eventually it will trickle down," said HMO customer Connie Burris.

"It does concern me the fact that the idea that the rates may go up and I may have to pay more. I don't like that idea at all," said HMO customer Leon Cooper.

Competition for North Carolina patients has been costly for many health care providers in recent years. Kaiser Foundation lost $21 million in 1997. Healthsource took a $4.2 million hit and Blue Cross-Blue Shield, which combines HMO losses with the rest of its business, also suffered.

"Now its sort of a balance. Now, they're saying 'we don't want to sustain any more losses because that will hurt our stock prices and our organization as a whole,'" said Sandy Van der Vaart of the N.C. Medical Society.

Van der Vaart contends that the HMOs will also take a healthy chunk from their doctors.

"In 1998 almost every company in the state has announced pretty significant reimbursement reductions," said Van der Vaart. "Yet at the same time, they're announcing premium increases. So, somebody stands to make some money there."

The rate hikes have not yet occurred. N.C.' insurance commissioner will have the final say, but HMO's hope they've gained the clout in the market share to press their case.

Industry analysts say they also expect to see rate hikes with traditional insurance as well.

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