Costs for employer-sponsored health care plans, including premiums for medical and prescription drug coverage, will increase at a slower rate in 2019, but will continue to outpace general inflation, according to Buck’s 37th National Health Care Trend Survey.
Health care insurers and pharmacy benefits managers report that the rate of increase for prescription drug costs (including price and utilization) are coming down by 1% overall for each group. Based on these indications, employers may expect to see their costs for prescription drugs going up, however they will be going up at a lower rate than was projected six months ago in Buck’s 36th Healthcare Trends Survey. Now, according to health insurers, the increase in prescription costs is projected at 10% (vs. 11% six months ago).
Employers and plan sponsors could expect to see the medical costs going up by a rate lower than was projected in the last survey as well. However, the decline in the rate of increase is not as pronounced as that for drug costs.
Buck measured the projected average annual increase in employer-provided health care benefit costs for four types of plans and found costs for preferred provider organizations (PPOs) will increase 7.5% in 2019 versus the projected 8.1% six months ago. Point-of-service (POS) plan costs are projected to increase 7.2% (versus 7.6% six months ago), health maintenance organizations (HMOs) are projected to increase 7.7% (the same as six months ago), and high-deductible consumer-driven plan costs are projected to increase 7.4% (versus 8.2%).
More favorable claim experience and a reduction in provider reimbursement rates were cited by respondents as two key reasons for the projected slowdown in trend increases in 2019.
Health insurers reported a weighted average prescription drug trend of 10%, which is down by 0.9% from the prior year. The weighted average trend reported by pharmacy benefit managers (PBMs), which generally do not take any underwriting risk, also dropped by a comparable rate of 1.0%, from 6.7% to 5.7%. Survey respondents cited a variety of reasons for the drop, such as reduced pharmacy reimbursement rates, reduced utilization, and reduced specialty drug costs.Buck’s Thirty-Seventh National Healthcare Trend Survey is based on responses from 112 insurers and/or administrators who provided input on the set of trend factors which they use to project health care factors. The survey report may be downloaded from here.