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Rising rates make health insurance harder to offer

Practice Management. By Mike Norbut, amednews staff. Nov. 25, 2002.

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Edith McFadden, MD, finds it "preposterous," but the reality right now is she can't provide health insurance for her single employee because it's too expensive.

"In the past, it's been over $10,000," said Dr. McFadden, an otolaryngologist and allergist in Milwaukee. "My employee now is not married and has no insurance. I'm concerned if there's any kind of accident, she has no catastrophic coverage."

Many physicians are feeling the health insurance pinch, especially as premiums continue to rise. Some reported increases have been as high as 20% to 30% this year, said Karen Roney, public relations specialist for the AMA Insurance Agency.

The increase was even more for Kent Walker, MD, an Ottumwa, Iowa, dermatologist working in a two-physician practice. Rates to cover three of the practice's eight total employees went up 45% this year, to $535 per employee per month. Dr. Walker said the practice was still weighing its options for next year, but he and his partner are considering giving employees a set amount of money that would help them subsidize their own individual insurance.

"We always tried to provide Cadillac coverage," he said. "But Cadillac coverage is getting too expensive."

Without a large pool of employees to help spread the risk, premiums are naturally higher for small practices than they would be for a large company. The rising rates have forced doctors to shop around more this year, and it's even made some of them put their own personal differences with managed care products aside and consider them as options for their practices, Roney said. [...]