Survey reveals health plan costs to increase in 2010

According to The Segal Company’s just-completed survey of projected 2010 health plan costs, medical plan cost trends will continue to be more than four times greater than the annual increase in average hourly earnings and in sharp contrast to changes in the consumer price index for urban consumers, which have been relatively flat or negative in the past 12 months. According to Edward Kaplan, Senior Vice President and National Health Practice Leader, “Health plan cost trends continue to put major pressure on plan sponsors, who are not waiting for health care reform. They are accelerating their efforts to control health care costs through renewed wellness and disease management programs, changes to value-based plan designs, eligibility audits, seeking more competitive vendor terms through bids and other innovative strategies.”

Other key findings include:

• In 2010, medical plan projections for most managed care plans are similar to those found in 2009, ranging from 10.2 percent to 10.8 percent.
• High-deductible health plans are projected to increase by just over one percentage point to 11.9 percent next year.
• Projected prescription drug trends, which remain under ten percent for the second consecutive year, continue to decline from a high of 19.7 percent in 2001.

• A majority of survey respondents indicated the cost impact to comply with the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) would be an increase of 1 percent or less.

In May and June 2009, The Segal Company surveyed 80 health insurers, managed care organizations, pharmacy benefit managers and third-party administrators for the trend factors they will be applying to actual medical claims to predict expected claims for 2010.

http://www.segalco.com/publications/surveysandstudies/2010trendsurvey.pdf