Employers, employees fret over healthcare.

• Author: Marshall, Jeffrey
• Position: Healthcare

It's hard for companies to find encouraging news on the healthcare front, but at least it appears that the pace of cost hikes for medical plans isn't increasing. In fact, it's projected to slow in 2004 for all coverage types except preferred provider organizations (PPOs), according to the 2004 Segal Health Plan Cost Trend Survey.

The improvement may not be worth shouting about, though. For example, the projected rate of increase for health maintenance organizations (HMOs), including prescription drugs, is 13.7 percent for 2004, just below the 14.4 percent projected for 2003. Prescription drug costs alone are expected to jump 18.1 percent this year, down slightly from 19.5 percent in 2003. The Segal Co. also reported that the difference in trend rates between all managed and non-managed medical plan types continues to decrease.

The New York-based company drew its projections for medical, prescription and dental claims cost trends from a survey of major insurance carriers, managed care organizations, pharmacy benefit managers and third-party administrators, plus data from 2002-2003.

A survey by Mercer Human Resource Consulting found that healthcare costs rose 10.1 percent last year, with the rise pared somewhat by companies shifting more of the costs to employees. In comparison, Mercer said, costs jumped nearly 15 percent in 2002.

Rising healthcare costs aren't only a concern for corporate bottom lines, either--they're taking a toll on employee morale and confidence about their future, according to a survey by American Express Financial Advisors Inc. A poll of more than 950 full-time workers whose companies provide healthcare found that 73 percent were either somewhat or very concerned about...