Health Premiums Soar 8.3% for U.S. Firms

Health insurance premiums paid by U.S. companies rose an average of 8.3% this year, the largest increase since 1993, as insurers passed on the rising cost of drugs to employers and sought to boost profits, according to a survey by the Henry J. Kaiser Family Foundation and the Health Research and Educational Trust. The survey of 3,402 U.S. businesses found that premiums for health-maintenance organizations rose 8.1% and preferred-provider organization 8.6%. Prescription-drug costs, which are up about 9%, accounted for 40% of spending by some health plans and are helping drive the premium increases, the survey said. Businesses also blamed their higher premiums on increased costs for hospitals and doctors and higher profits by insurers--which held premiums in check in the mid-1990s in order to boost enrollment.

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