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EMPLOYERS' TOTAL HEALTH BENEFITS COSTS INCREASED 10.1 PERCENT IN 1992

 Slowdown in Managed Care Cost Increases Offsets Surge
 in Traditional Indemnity Medical Plan Costs
 /ADVANCE/ NEW YORK, March 1 /PRNewswire/ -- The cost of providing traditional medical coverage to U.S. employees accelerated in 1992, while cost increases for managed care programs moderated, lending support to an anticipated "managed competition" reform proposal, a new nationwide survey reports.
 The survey of 2,448 employers conducted by the New York-based benefits consulting firm Foster Higgins shows the cost of traditional indemnity plans jumped 14.2 percent in 1992 while the cost for Health Mainal plans last year -- Point-of-Service (POS) plans increased 8.4 percent and Preferred Provider Organization (PPO) plans rose 10.5 percent.
 As a result, employers' total health benefit costs rose 10.1 percent in 1992 to an average $3,968 per employee. The increase was the smallest in five years but still more than triple the inflation rate.
 The survey also shows that, for the first time, more than half of the respondents' workers participate in managed care plans.
 "Managed care programs are beginning to live up to their promise to deliver significant cost savings over traditional indemnity plans," said John Erb, a Foster Higgins principal and the study's author. "The fact that more employers and workers are accepting managed care bodes well for health care reform efforts in Washington which encourage managed competition."
 Nationwide, the cost of indemnity medical plans averaged $4,080 per employee in 1992, which is 23.2 percent or $767 more than the average $3,313 cost per employee for HMO coverage. Traditional indemnity plans were 14.4 percent more costly than POS plans ($3,566 per employee) and 10.0 percent more expensive than the average PPO cost ($3,708 per employee).
 More Employers, Employees Embracing Managed Care
 More than three-fourths (77 percent) of employers offered at least one type of managed care plan to employees in 1992, vs. 73 percent in 1991. Additionally, 30 percent do not offer an indemnity plan option at all.
 The Foster Higgins survey noted that, for the first time, more than half (51 percent) of employees who receive health benefit coverage were enrolled in managed care plans. More than one-fourth (26 percent) enrolled in HMOs in 1992, up from 23 percent the previous year, while enrollment in PPOs grew from 17 percent in 1991 to 20 percent last year. Enrollment in POS plans remained steady at 5 percent. The remaining 49 percent of eligible employees were in indemnity plans.
 /delval/
 -0- 3/2/93
 /CONTACT: Ed Emerman of Foster Higgins, 609-520-2766/


CO: Foster Higgins ST: New York IN: INS SU:

MJ-JS -- PH009 -- 1353 03/01/93 11:10 EST
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Date:Mar 1, 1993
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