Premium Trends What is the Impact of Competition
Premium Trends: What Is The Impact Of Competition?
December 28, 1999
In preparing our annual Managed Care Reviews
, we compare how much each HMO collects in premium revenue from its commercial HMO enrollees. We then convert that number to a per member per month figure, and compare that to previous years. The figure below compares six states on the trend in their HMO commercial premium revenue. An article in the January 2000 issue of Minnesota Medicine
, published by the Minnesota Medical Association, will discuss these issues in greater detail. When compared to commercial HMOs in these other states on average premium revenues, Minnesota HMOs were near the bottom in 1995. As the figure shows, though, HMOs in those states have seen their average revenues stay flat or even decline since 1995. By 1998, Minnesota was at the high end of these six states. In four of the states, average revenues in 1998 were still below what HMOs collected in 1995. Even in Michigan, where the United Auto Workers and the major automobile manufacturers have negotiated rich benefit packages with a minimum of enrollee cost-sharing, HMO premium revenues have been flat, and average revenues have fallen below Minnesota.