Medical plan trends, blended with freestanding prescription drug trends, will see an increase of 15.6% for Fee-for-Service (FFS), 14.4% for Preferred Provider Organizations (PPO), 14% for Point-of-Service (POS) and 13.7% for Health Maintenance Organizations (HMO) in 2004, preliminary results of the 2004 Segal Health Pan Cost Trend Survey reveal. However, compared to 2003’s numbers the results are fairly tame, where the same plans saw increases of 16.2%, 14.5%, 14.9%, and 14.4%, respectively (See 2003 Medical Cost Trend Projections Are Released ).
Taking out the freestanding prescription drug trends shows the increases to be not nearly as drastic. In this scenario, FFS plans will see an increase of 15%, followed by increases in:
- PPO – 13.5%
- POS – 12.9%
- HMO – 12.5%
Also coming in with double-digit projected increases are hospital and physician services. Leading the upward trend are PPOs with increases of 13.7% and 11.8%, respectively. Followed by:
- POS – 13.8% and 11.5%
- HMOs – 12.8% and 11.7%
Prescription Drug Plans
Prescription drug trends are expected an increase of nearly 20% in 2003, once again representing the fastest rising cost component of health-care plans. Individual components of this trend show an 18.2% preliminary retail increase for active workers and retirees under 65 and a 16.2% increase for retirees 65 and older. However, as with most trend forecasts, the numbers for the coming year have been lower than 2003’s, where a retail prescription drugs were up 19.5% for active workers and retirees under 65 and 19% for retirees 65 and older
Likewise, preliminary mail order prescription forecasts are expecting similar trends that are lower than 2003. Active workers and retirees under 65 can expect a 17.6% increase. Retirees 65 and older will see an increase of 17.3%.
Dental plans, such as FFS dental plans, Dental Provider Organizations (DPOs) and Dental Maintenance Organizations (DMOs) are expecting increases of 7.4%, 6.8% and 5.2%, respectively, in 2004 trends. However, only DMOs will see an increase from 2003’s projections, with this year’s projections coming in 0.3% higher. Otherwise, FFS and DPO plans will see trend projection decreases that are 0.4% and 0.8% lower, respectively, from last year’s forecast.
Segal notes rates in dental plans have historically been lower than those of medical and prescription drug trends.
The 2004 Segal Health Plan Cost Trend Survey received responses from 60 major insurance carriers, third party administrators, medical care organizations and pharmacy benefit managers.Full results will be published during the autumn and will include a comparison of forecasts for the past several years for group medical, dental and prescription drug benefit plans to actual cost increases for those same years.