Costs for the most popular types of health care coverage are projected to increase at double-digit rates through the remainder of 2007 and into 2008, according to a national survey of insurers and administrators.
NEW YORK: Nov. 28, 2007 – Costs for the most popular types of health care coverage are projected to increase at double-digit rates through the remainder of 2007 and into 2008, according to a national survey of insurers and administrators. The survey released today by Buck Consultants, an ACS company and one of the world’s leading human resource and benefits consulting firms, analyzed responses from 79 health insurers, HMOs, and third-party administrators.
In its 18th National Health Care Trend Survey, Buck measured the projected average annual increase in employer-provided health care benefit costs. Insurers providing medical trends for the survey cover a total of approximately 91 million people.
As the data below indicates, costs for the most popular plans continue to increase by more than 10 percent, similar to trends reported in Buck’s 17th survey, conducted in early 2007.
Type of Plan: Preferred Provider Organization (PPO)
18th Survey: 10.75%
17th Survey: 10.60%
Difference +0.15%
Type of Plan: Point-of-service (POS)
18th Survey: 10.54%
17th Survey: 10.56%
Difference -0.02%
Type of Plan: Health Maintenance Organization (HMO)
18th Survey: 11.14%
17th Survey: 11.11%
Difference +0.03%
Type of Plan: High Deductible Consumer Driven
18th Survey: 10.36%
17th Survey: 11.11%
Difference -0.75%
Health insurers reported an average prescription drug trend of 11.68 percent, up slightly from the 11.33 percent reported in the prior survey. This is considerably higher than the 4.52 percent reported by pharmacy benefit managers (who generally do not take any underwriting risk).
Health insurers reported lower trends for plans that supplement Medicare ¾ 7.32 percent for plans with drug coverage and 6.82 percent for plans without. This reflects the impact of federal controls on Medicare fees and the lower increases expected in Medicare deductibles and co-pays.
The survey also reported trend factors for dental and vision plans.
“Insurers are concerned about the cost shifting to private employers that may result due to health care reform at the state level,” said Harvey Sobel, FSA, a Buck principal and consulting actuary who directed the survey. “Complying with federal and state mental health parity laws is also expected to raise costs.”
Health insurers use trend factors to calculate premium rates, and large self-funded employers use these trend factors to budget their future health care costs. In general, trend factors provide for price increases that may result from such variables as inflation, utilization of services, technology, changes in the mix of services, and mandated benefits.
Buck Consultants, an ACS company, is a leader in human resource and benefits consulting with more than 1,500 professionals worldwide. Founded in 1916 to advise clients in establishing and funding some of the nation’s first public and private retirement programs, Buck is an innovator in the areas of retirement benefits, health and productivity programs, talent management and rewards strategies, and employee communication. News and other information about Buck Consultants are available at www.buckconsultants.com. Buck is an independent subsidiary of Affiliated Computer Services, Inc.
ACS, a global FORTUNE 500 company with more than 62,000 people supporting client operations in more than 100 countries, provides business process outsourcing and information technology solutions to world-class commercial and government clients. The company's Class A common stock trades on the New York Stock Exchange under the symbol "ACS." ACS makes technology work. Visit ACS on the Internet at http://www.acs-inc.com.
Buck’s 18th “National Health Care Trend Survey” is available to the media by contacting Ed Gadowski at 201-902-2825. It is available to other interested parties for $100 from Buck’s Global Survey Resources, 500 Plaza Drive, Secaucus, NJ, 07096-1533. Telephone 800-887-0509. It also can be ordered online at www.bucksurveys.com.
The HR industry´s premier online community and resource for Human Resource professionals: HR, human resources, HR community, human resources community, HR best practices, best practices in human resources, online communities for HR, HR articles, HR news, human resources articles, human resources news, HR events, leadership, performance management, staffing and recruitment, benefits, compensation, staffing, recruitment, workforce acquisition, human capital management, HR management, human resources management, HR metrics and measurement, organizational development, executive coaching, HR law, employment law, labor relations, hiring employees, HR outsourcing, human resources outsourcing, training and development
hr.com.
human resources management resources for hr professionals. |
HR menus
|
HR events
|
HR Sitemap