Tracking health care costs: long-predicted upturn appears.

Abstract

After three years of anticipation, health care cost trends have taken an upward turn. In employment-based insurance, premium increases for 1999 were in the 5 percent range, up from 3 percent for 1998. The rate of increase in underlying costs of private insurance--lagged by one year--also rose by approximately 2 percentage points. Many had expected a sharper upturn in premium increases than underlying cost increases. This would have heralded a turn in the insurance underwriting cycle, which has not yet occurred. This Issue Brief tracks the rate of growth of health care costs and the experience with premiums for employment-based health insurance and discusses the impact of these trends on consumers.