Health Cost Hikes Trend Up in 2008

A Buck news release said those costs are projected to increase at double-digit rates through the rest of 2008 and into 2009, according to the national survey of 79 health insurers, HMOs and third-party administrators.

Health insurers reported an average prescription drug trend of 11.4%, down slightly from the 11.7% reported in the prior survey. This is considerably higher than the 7.8% reported by pharmacy benefit managers (who generally do not take any underwriting risk).

For plans that supplement Medicare, health insurers reported a projected increase of 6.9% outside of prescription drug coverage. This lower trend reflects the impact of federal controls on Medicare fees and the lower increases expected in Medicare deductibles and co-pays, Buck said.

“While trends have come down significantly since 2003, they still remain stubbornly high,” said Harvey Sobel, FSA, a Buck principal and consulting actuary who directed the survey, in the news release. “We are concerned that these trends may not yet reflect the impact of recent inflationary increases, which may put additional cost pressure on health care providers to raise their fees.”

The survey is available for $100 from Buck’s Global Survey Resources, 500 Plaza Drive, Secaucus, NJ, 07096-1533, 800-887-0509 or http://www.bucksurveys.com .