Modesto, CA - MCOL found a relationship between premium rates and health plan consumer satisfaction levels, using a specific population for study. Plans with the highest satisfaction levels charged more than average, and plans with the lowest satisfaction levels charged less than average. However, recent premium increases for plans with the lowest satisfaction levels were much greater.

MCOL examined survey satisfaction rating responses for the 350 participating plans in the Federal Employees Health Benefit Program (FEHBP) and compared responses of plans with the highest and lowest satisfaction ratings to their respective premium rates for 1997 and 1998.

Using the FEHBP 1997 Customer Satisfaction Survey, MCOL identified the top ten plans with an overall satisfaction rating of 90% or greater and the ten plans with the lowest satisfaction ratings. MCOL then studied the relationship between the premium rates, and premium increases for these identified plans, and compared them to the average premiums and increases for the FEHBP.

"The consumer perception that "you get what you pay for" and that "higher prices equal better quality" somewhat rang true in this comparison study. The premium for plans with the ten highest satisfaction levels averaged 5-6% higher than the individual and family premiums for all FEHBP HMO plans. Conversely, the average premium for the plans with the ten lowest satisfaction rates were 9% lower for individual rates and 3% lower for family rates than the FEHBP as a whole," commented Claire Bollier Thayer, MCOL Director of Research and Development. "We would note however, that geographical pricing may account for some of this variation, and that premium increases followed a different trend."

"Our study also found that, on average, premium rates for individual and family health plans participating in the FEHB program increased about 4.5% and that premiums for the highest satisfied plans increased just about this same amount. However, the ten plans with the lowest satisfaction ratings actually had premium rate increases somewhat higher than the FEHBP average, 10.1% for individual rates and 7.1% for family premium rates," concluded Ms. Thayer.

A free copy of this report is available from MCOL upon request, or can be viewed for free on the MCOL web site at www.mcol.com/mcrep1.htm.