The actual cost increases for '99 aren't yet out. But the indication is we're going to see cost increase of the 7 to 10 percent range, which is significantly higher than the last three to five years. A new survey by Peat Marwick shows the cost of health care benefits has already risen 3.3 percent nationwide this year, and the increase is even greater in California, 4.2 percent, in a state that has traditionally had lower health plan premiums in much of the rest of the country. As the nation's oldest and largest HMO, Kaiser is often seen as a benchmark for prices. We felt that it was too much in one year.
Critics charge that HMOs underpriced their products to gain customers.
Some analysts say Kaiser and other HMO's underpriced their products during the early and mid 1990's in an effort to increase membership and gain market share. And low rates did increase membership dramatically. That's up from 45.2 million workers just four years earlier. Some polls show as membership has risen, so has dissatisfaction with managed care. A Louis Harris poll last March showed only 45 percent of those surveyed felt managed care companies were doing a good job.