Milliman, Seattle, recently completed its 2010 Group HealthInsurance Survey, which projects an average 10.2 percent premiumrate increase for January 2011 renewals for healthmaintenance organizations and an 11.7 percent increase forpreferredprovider organizations. These increases also possibly reflectsome change because of implementation requirements of the Patient Protection and Affordable Care Act.

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For premium rates, the reported annual historical growth was10.9 percent for HMOs and 11.7 percent to 12.0 percent for PPOs.The PPO results were collected for both a standard plan and ahigh-deductible plan. In 2009, commercial insurers saw a median1.1 percent pretax profit as a percent of premium.

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The Milliman survey requested a response from HMOs and PPOsbased on a set of group health benefits and demographics. Thesurvey eliminates three key issues that can distort the resultsoutlined in other health cost surveys: modifications in plandesign, shifts in premium sharing between the employer andemployee, and member demographics. Thus, these trends indicate therise in medical utilization and costs experienced and anticipatedby the HMOs and PPOs.

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Because of the PPACA, the 2010 survey also asked insurers whatprovider contracting changes and cost-saving initiatives are beingconsidered. Typically, insurers plan to employ more qualityincentive programs, initiate more shared risk with their providernetworks, offer greater price transparency for members, moreaggressively tier provider networks and cut broker commissions.Nearly all are preparing, they report, to participate in the 2014PPACA insurance exchanges.

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The 2010 report includes premium rates, trends for medical andprescription drug coverage, prescription drug costs, views towardrecent health care reform legislation, and progress towardimplementing ICD-10 coding per survey responses. Additionally,Milliman supplies hospital inpatient cost and utilization data,physician reimbursement levels, medical expense ratios and profitlevels from Milliman's available databases. Results, which areshown separately for HMOs and PPOs when feasible, are provided bymetropolitan area, state, region and nationwide.

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