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Health Insurance Premium Growth Slows

Armen Hareyan's picture

Health insurance premium cost

Health insurance premiums are growing at a reduced rate, despite increased utilization and higher costs, while health insurance plans' efforts are easing drug cost increases, a new report released today finds.

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Prepared by PricewaterhouseCoopers (PwC) on behalf of America's Health Insurance Plans (AHIP), "The Factors Fueling Rising Healthcare Costs 2006" examines the causes of rising health care costs and analyzes how health insurance premium dollars are being spent.

The study found that premiums increased 8.8 percent between 2004 and 2005, which is 36 percent lower than the 13.7 percent increase a similar report found in 2002.

Higher utilization of services accounted for 43% of the increase, fueled by factors such as increased consumer demand, new and more intensive medical treatments and defensive medicine, as well as aging and unhealthy lifestyles.