Health Plan Cost Increases are Slowing

October 2, 2006 ( - Though increases for health care plan coverage continue to be in the double digits, cost increases are slowing, a survey released by Buck Consultants indicates.

In a press release, Buck said its survey found the increase in cost for a preferred provider organization (PPO) plan was 10.9% in 2006, compared to 12.7% in 2005. Point-of-service (POS) plan costs increased 10.8% versus a 12% increase in 2005, while costs for health maintenance organization (HMO) plans increased 10.8% – a percentage point less than the cost increase for 2005.

The survey also found a slower rate of increase for high deductible health plans (HDHPs) – 11% in 2006 versus 12.3% in 2005. “Although health care trends are still higher than the general inflation rate, employers should see more moderate rate increases in 2007,” said Harvey Sobel, FSA, a Buck Principal and Consulting Actuary, in the press release.

As for prescription drug benefits, health insurers and pharmacy benefit mangers reported prescription drug trend factors two to three percentage points lower in the 2006 survey than in the survey for 2005. Combined they reported a prescription drug cost increase of 8.2%, compared to an increase of 11.1% in 2005. Sobel said in the press release that this is the lowest level of increase Buck has seen since it started conducting the survey.

Buck’s 16th “National Health Care Trend Survey” analyzed responses of more than 70 health insurers, HMOs and third-party administrators. It is available for $100 from Buck’s Global Survey Resources, 500 Plaza Drive, Secaucus, NJ, 07096-1533. Telephone (800) 887-0509.