Cost increases for all types of medical plans in the U.S. are expected to be between 0.2% and 0.6% lower through the first half of 2013 than they were a year earlier, according to a survey by Buck Consultants, A Xerox Company.
The 25th annual edition of the company’s National Health Care Trend Survey projected cost increases of less than 10% for all plan types, for the first time since 2001.
Despite the slowdown in cost increases, the company cautioned that healthcare costs would continue to outpace inflation, creating challenges for business leaders. “The stubbornly high costs can be attributed to several trends, ranging from a greater use of diagnostic tests and treatments to mandated coverage of certain benefits. Employers need to decide how much of these increases to pass on to workers, or whether to drop coverage and pay the penalties imposed by the Affordable Care Act,” said Daniel Levin, a principal and consulting actuary who directed the survey.
Health insurers reported an average prescription drug trend of 10.1%, up 0.5% from the prior survey. For plans that supplement Medicare, health insurers reported a trend of 5.4%, excluding prescription drug coverage, down from 5.8% in the prior survey. This lower trend of Medicare supplement plans reflects the impact of federal controls on Medicare fees and the lower increases expected in Medicare deductibles and co-pays.
Health insurers use trend factors to calculate premium rates, and large self-funded employers use these trend factors to budget their future healthcare 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.