Buck Finds Smaller Rise in Health Care Costs

September 22, 2005 (PLANSPONSOR.com) - Employer health care costs will continue to rise in 2006, but not as much as in previous years.

Buck Consultants 14 th National Health Care Trend Survey shows that health care trends (forecast change in claims costs) for 2006 are lower than they were for 2005, according to a company press release. Specifically, trends for Preferred Provider Organizations (PPO) and Point of Service (POS) plans are each down 1% to 12.4% and 12.3% respectively. Health Maintenance Organization (HMO) trends are down .8% to 11.3%.

Harvey Sobel, a Buck Principal and Consulting Actuary, who directed the survey, said in the news release,“Insurers are seeing 2005 claim costs coming in lower than they had projected a year ago, and they believe these lower trends will continue into 2006.” He said employers credit improved financial results with the lower health care costs.

In addition, Buck said in the news release that, while trends for prescription drug programs are generally forecast to be slightly higher than those for programs, prescription drug trends reported by health insurers are also down from those reported in Buck’s prior survey. Specifically, the release showed the survey results as follows:

  • Pharmacy Benefit Managers: 11.6%, down 1.4% from prior survey
  • Insurers: 14.4%, down 1.5% from prior survey
  • Combined: 12.8%, down 1.9% from prior survey

Health insurers use trend factors by coveragesuch as medical, prescription drugs, dental and vision care – to calculate their premium rates, and large self-funded employers use these trend factors to budget their future health care costs, Buck said in the release.

The survey consisted of responses from 80 insurers and administrators. A copy of the survey is available for $100 from Buck’s Survey Department, 500 Plaza Drive, Secaucus, NJ, 07096-1533. Telephone (201) 553-6400.