Rate of Health Coverage Hikes up in 2011

A Buck news release about the survey said the rate of increase seen in the latest data was higher than the year before:

• Preferred Provider Organization (PPO) – 11.6% (up from 11.1%)
• Point-of-service (POS) – 11.3% (up from 10.9%)
• Health Maintenance Organization (HMO) – 10.6% (up from 10.3%)
• High Deductible Health Plan (HDHP) – 11.3% (up from 10.3%)
   

“The trend factors reported in our survey reflect, in part, that health insurers anticipate higher claim costs under health care reform,” said Harvey Sobel, a Buck principal and consulting actuary who directed the survey, in the news release.  “Also, due to current economic uncertainty, insurers may be projecting higher claim costs because employees who remain after layoffs tend to be older and more expensive to insure.”

Health insurers reported an average prescription drug trend of 11.3%, up 0.4 points from the 10.9% percent reported in the prior survey.  This is almost twice the 5.8% 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 6.4% excluding prescription drug coverage, up from 5.8% in the prior survey. 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.

The survey covered more than 120 insurers and administrators. Insurers providing medical trends cover a total of approximately 150 million people, according to Buck.