Study anticipates double-digit rise for health care.

After slowing slightly this year, health care premium costs are projected to take off again in 2004, rising at a 13 percent clip, according to a survey being released this week by Mercer Human Resources Consulting.

When broken out for Los Angeles, total heath benefit costs rose 12.6 percent this year, and they are expected to slightly outpace the nation next year at 13.5 percent.

"They are looking at double-digit increases again," said Praveen Thadhani, a principal at Mercer's Los Angeles office.

These results conflict somewhat with that of another survey released in September by the consulting firm Towers Perrin. That survey found health care benefit inflation would slow to 12 percent in 2004 from 16 percent this year.

However, both firms agree that the nation is on pace for yet another year of double-digit increases--and that employers are making employees pay a greater share of health costs by increasing their share of monthly premiums and requiring higher out-of-pocket costs for office visits and drugs. Many plans now require co-pays for hospital visits.

The Mercer survey found, for example, that in 2003 the average employee contribution--without a family--for an HMO plan rose to 35 percent from 31 percent the previous year, while the average employee with family coverage contributed 57 percent from 50 percent.

More cost shifting is expected next year, but Thadhani said it likely will be slower, given employee resistance. Instead, more employers will seek some relief from "disease management" and other innovative programs. Disease management involves insurers actively overseeing employees with diabetes, heart problems and other chronic diseases to ensure they are getting the appropriate care and even minding their weight and diet.

"I think employees are looking more to new avenues than they have in the past," he said.

Also expected next year are efforts to encourage employees to take a more active role in health benefit management--for example, by choosing a hospital with high marks for cardiac care if they should need some cardiac procedure.

The total health benefit cost nationally this year per employee averaged $6,348, with Los Angeles not far behind at $6,335, despite the region's traditionally high HMO penetration rate, according to the survey.

Nationally, HMO enrollment dipped to a seven-year low as employees flocked to PPOs with their greater choice, despite the increased costs associated with the plans, the survey found.

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