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HMO PREMIUM INCREASES WILL CONTINUE TO MODERATE IN 1992

 HMO PREMIUM INCREASES WILL CONTINUE TO MODERATE IN 1992
 WASHINGTON, Dec. 10 /PRNewswire/ -- The nation's HMOs will raise premiums an average of 10.9 percent in 1992, a lower rate of increase than in 1991, when increases averaged 12.9 percent. Surveyed HMOs believe they are in a favorable market position entering 1992 and will have a rate advantage over fee-for-service plans.
 These findings are from "HMO Market Position Report," based on a random sample of 48 HMOs enrolling 10.7 million people nationwide. Of the 48 plans, 27 percent view their market position as excellent, 56 percent as good, 27 percent as fair and none as poor.
 "HMOs have a basis for their optimism," according to the report's lead author, Marsha R. Gold, Sc.D., Group Health Association of America, Inc., (GHAA) director of research and analysis. "They've responded to purchaser concerns by limiting premium growth, offering diversified products and serving the small group market," Gold said.
 At the same time, surveyed HMOs perceive that their ability to retain market share will depend on HMO products that continue to limit premium rates. When asked to indicate the single most critical marketplace issue, 54 percent of plans cited price, a greater level of concern than has been evident in prior surveys.
 Moreover, virtually all responding plans perceived the effects of the current recession on the marketplace. Seventeen percent said the recession had resulted in a net increase in enrollment because of the price attractiveness of HMO products, while 40 percent said it had led to a decline following layoffs, firm liquidations and terminations in health benefits.
 HMOs continue to diversify. Fifty percent of plans will offer an open-ended product in January 1992, 15 percent for the first time; 60 percent will offer a total replacement product, 10 percent for the first time; and 35 percent will offer an employer self-insured product, 8 percent for the first time.
 Other findings: Plans anticipate retaining 96 percent of accounts renewing in January; total enrollment among the 48 responding plans grew 5.1 percent in 1991; and the proportion of profitable plans matched the high levels in 1990.
 Plans cited small group reform/the uninsured as a top health policy concern. Twenty-five percent are participating in a federal, state or privately sponsored demonstration project to expand coverage to the uninsured; 85 percent have products for small groups (fewer than 25 employees).
 Telephone interviews for the survey, conducted annually by GHAA, were completed in late October and early November 1991.
 To obtain an "HMO Market Position Report," write Research and Analysis Department, Group Health Association of America, 1129 20th St., N.W., Washington, D.C. 20036.
 -0- 12/10/91
 /NOTE: Graphs are available./
 /CONTACT: Susan Pisano of the Group Health Association of America, 202-778-3200/ CO: Group Health Association of America, Inc. ST: District of Columbia IN: HEA SU:


TW-DC -- DC005 -- 0948 12/10/91 10:46 EST
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Publication:PR Newswire
Date:Dec 10, 1991
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