Medical Plan Cost Trend Rates to Decline in 2012

September 27, 2011 ( - Medical and prescription drug plan cost trend rates for 2012 are expected to decline from 2011 levels, according to the 2012 Segal Health Plan Cost Trend Survey. 

Key findings of the 2012 Segal Health Plan Cost Trend Survey include:

•  All medical plan types are projected to experience lower cost trends for 2012.

•  Prescription drug trends for active participants and early retirees are forecast to decline by 2 percentage points from projections for 2011.

•  Medicare Advantage HMO trend rates are projected at 3 percentage points below HMO trends for active participants and early retirees.

•  Price inflation for services and supplies continues to be the biggest element of overall medical plan cost trends.

•  Seventy-five percent of survey participants expect the extension of coverage (under the Affordable Care Act) to dependent adult children up to age 26 will contribute to an increase in 2011 plan costs.


Edward A. Kaplan, SVP and Segal’s National Health Practice Leader noted in a press release, “Although the rate of increase in health plan cost trends is slowing, but still above the CPI, it is important to remember that those rates are still putting pressure on both private and public sector budgets. Plan sponsors need to continue to implement cost-management strategies that mitigate increases and improve overall health and well-being for their plan’s population.”

He added, “Plan sponsors must balance the needs of plan participants and the demands of the Affordable Care Act in order to moderate escalating health costs while providing financially sustainable, high-quality health care.”

For complete survey results, visit