Management consultant Hay Group expects that annual premium increases for health coverage will average approximately 9 percent during 2010. This estimate represents the increase in premiums before any changes in plan design, medical management or plan administration. Because plan sponsors routinely adjust their programs to help control cost, it is likely that actual premium increases after offsetting changes will be somewhat lower.
“including: the aging working population, especially given recent downsizing; and possible increases in underlying healthcare prices in anticipation of reform.”
These projections are based on an annual study of trends in health premiums which Hay Group has performed for the last 30 years. This study is based on data from the annual Hay Benefits Prevalence Report (HBPR) and the Federal Employees Health Benefits Program (FEHBP). The data from the HBPR show that the annual increase in premiums for employer sponsored plans in 2009 was lower than for any year since 2000. Data from the FEHBP program indicate that the recent decline in annual trend rates may have bottomed out.
“There are several factors contributing to this trend,” said Tom Wildsmith, FSA, MAAA, a senior consultant in Hay Group’s benefits practice, “including: the aging working population, especially given recent downsizing; and possible increases in underlying healthcare prices in anticipation of reform.”
The 2009 Hay Benefits Prevalence Report includes data from 842 U.S. employers. The report compares and analyzes all aspects of the employee benefit programs offered by participating employers. It reflects all facets of the U.S. economy and is one of the most comprehensive and detailed analyses of U.S. employee benefits data from for-profit, not-for-profit, and public sector employers.
FEHBP is a program through which U.S. government employees, retirees, and their dependants can obtain health insurance coverage. Under FEHBP, health insurance products are marketed, in a system of “managed competition,” by private insurance companies and employee associations, similar in nature to the “Public” option as has been included in various Reform options.